THE EFFECTIVENESS OF FINANCIAL MANAGEMENT IN SCHOOLS IN THE

LEJWELEPUTSWA EDUCATION DISTRICT

by

TLALE ESSAU MPOLOKENG

submitted in fulfillment of the degree of

MAGISTER EDUCATIONIS

in

The School of Teacher Education

(Faculty of Humanities)

at the

Central University of Technology, Free State

Welkom Campus

Supervisor: Prof GJ Schlebusch

2011

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 DECLARATION

I declare that this research study:

THE EFFECTIVENESS OF FINANCIAL MANAGEMENT IN SCHOOLS IN THE

LEJWELEPUTSWA EDUCATION DISTRICT

is my own independent work, and that all of the sources used or quoted have
been indicated and acknowledged by means of complete references.

________________________

T.E MPOLOKENG

DATE: 28 November 2011

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 DEDICATION

This study is dedicated to the following:

 my late parents, Stephen Moete Mpolokeng (2006) and Moretlo Dorah

Mpolokeng (2007);
 my wife, Moroesi Mirriam Mpolokeng;
 my brother, Geelbooi Jacob Mpolokeng;
 my sisters, Elen Pulane Mpolokeng; Rachel Mamonana Mpolokeng and
Tselane Alinah Mpolokeng;
 my late cousin Petjo Thahakadu Abraham Mpolokeng;
 my late friend, N Tsunke;
 ms P Kellerman, and
 to all my friends who helped and assisted me.

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 ACKNOWLEDGEMENTS

I wish to express my sincere gratitude and appreciation to:

 The almighty God who has been the light of my life throughout my studies.

 Pr. G. Schlebusch, my supervisor, for his guidance, motivation, support and

compassion in ensuring that this study was successfully completed.

 Mrs. P. Kellerman for her professional typing.

 My wife, Moroesi Mirriam Mpolokeng, for her continued support and

confidence in me throughout this study.

 Participants who made this study possible by sharing their experiences, views
and expert

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 ABSTRACT

Financial management is fundamental to the improvement of the efficient and

effective use of finances in schools. If principals and SGB chairpersons are well
trained on their roles and responsibilities regarding financial management, they
will be able to effectively deal with financial matters of schools. Financial
management is an integral part of efficient and effective financial management in
schools.

This study provides a literature discussion on funding provided to schools by the

government, as well as the essences of financial management in the school
setting. The study also sought to scrutinize the impact of related Acts and
policies on financial management in schools. The fieldwork sought to determine
the extent of possible problems that schools experience regarding financial
management and aimed at providing possible solutions for efficient and effective
financial management in schools.

Principals and SGBs chairpersons made up the sample of this study.

Questionnaires were used to determine the views and opinions of these
participants regarding the efficiency and effectiveness of financial management
in their schools. The data gathered through the open-ended questionnaires were
analysed and reported on qualitatively.

The key findings were that principals and the SGBs chairpersons wish to play an
important role in financial management in schools, but lack financial
management skills to do so. The lack of financial management skills was more
evident on the side of the SGB chairpersons. The result of this lack of financial
management skills has the effect that other types of financial problems arise at
schools.

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 TABLE OF CONTENTS

CHAPTER 1 1

1.1 INTRODUCTION 1
1.2 BACKGROUND OF THE STUDY 1
1.3 PROBLEM STATEMENT 2
1.3.1 Research questions 3
1.4 AIMS AND OBJECTIVES OF THE STUDY 4
1.5 PRELIMINARY LITERATURE REVIEW 4
1.6 DELIMITATION OF THE STUDY 6
1.7 LIMITATION OF THE STUDY 6
1.8 CONCEPT DEFINITIONS 6
1.8.1 Financial efficiency 6
1.8.2 Assets and liabilities 6
1.8.3 Financial planning (budgeting) 7
1.9 CONCLUSION 7

CHAPTER 2 8

2.1 INTRODUCTION 8
2.2 GENERAL MANAGEMENT CONCEPTS 9
2.2.1 Planning 10
2.2.2 Organising 10
2.2.3 Leading 11
2.2.3.1 Delegation 11
2.2.3.2 Communication 12
2.2.3.3 Motivation 12
2.2.4 Control 13
2.3 SCHOOL FUNDING 14

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2.3.1 Norms and standards of school funding 15
2.3.2 Decentralisation of school funds 16
2.3.3 The quintiles 18
2.4 FINANCIAL MANAGEMENT IN EDUCATION 21
2.4.1 The role of the principals as financial manager 22
2.4.2 The role of the school governing body (SGB) 24
2.4.2.1 The composition of the SGB 26
2.4.3 School finances – the link between the SGB and the 27
principal
2.4.4 The school finance committee 29
2.4.4.1 The role of the school finance committee 30
2.5 LEGAL ASPECTS OF FINANCIAL SCHOOL 31
MANAGEMENT
2.5.1 Legal frameworks 31
2.5.2 Managing school finances 33
2.5.2.1 Financial record keeping and control 34
2.5.2.2 Cash management 37
2.6 BUDGETING 38
2.7 FUNDRAISING 42
2.7.1 Fundraising committee 44
2.8 AUDITING 45
2.9 CONCLUSION 45

CHAPTER 3 47

3.1 INTRODUCTION 47
3.2 WHAT IS RESEARCH? 47
3.3 RESEARCH DESIGN AND METHODOLOGY 49
3.3.1 Research design 49
3.3.1.1 Advantages of qualitative research 51
3.3.1.2 Disadvantages of qualitative research 51

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3.3.2 Research methodology 51
3.3.3 Population and sampling 53
3.3.3.1 Purposive Sampling 53
3.4 DATA COLLECTION INSTRUMENTS 55
3.4.1 Questionnaires 55
3.4.1.1 Open-ended questionnaires 55
3.5 ANALYSIS OF DATA 57
3.6 MEASURES TO ENSURE TRUSTWORTHINESS 58
3.6.1 Credibility 59
3.6.2 Transferability 59
3.6.3 Dependability 60
3.6.4 Confirmability 60
3.7 CONCLUSION 61

CHAPTER 4 62

4.1 INTRODUCTION 62
4.1.1 Description of data 62
4.2 ANALYSIS AND REPORTING OF DATA 62
4.2.1 Biographic information (Principals) 63
4.2.2 Responses from principals 63
4.2.3 Biographic information (SGB chairperson) 86
4.2.4 Responses from the SGB chairpersons) 90
4.3 CONCLUSION 105

CHAPTER 5 110

5.1 INTRODUCTION 107

5.2 SUMMARISED FINDINGS OF STUDY 107
5.2.1 Findings from the Literature study 107
5.2.2 Findings from Questionnaires 111

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5.2.2.1 Responses from the Principals 111
5.2.2.2 Responses from chairpersons of SGBs 113
5.3 RECOMMENDATIONS 116
5.4 SUGGESTIONS FOR FURTHER RESEARCH 118
5.5 CONCLUSION 119
BIBLIOGRAPHY 120

ANNEXURE A 129
ANNEXURE B 130
ANNEXURE C 131
ANNEXURE D 132
ANNEXURE E 133
ANNEXURE F 140

LIST OF FIGURES

Figure 2.1: The four fundamental management tasks 9

Figure 2.2: Motivation process 13

LIST OF TABLES

Table 2.1: Structuring a budget 39

Table 3.1 Major types of research methods 52
Table 3.2 Criteria for judging qualitative and 59
quantitative research
Table 4.1: Gender 63
Table 4.2: Age 64
Table 4.3: Experience as principal 64
Table 4.4: Academic qualifications 65

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Table 4.5: Professional qualifications 65
Table 4.6: Qualifications in finance 66
Table 4.7: Quintiles 66
Table 4.8: Type of school 67
Table 4.9: Gender 86
Table 4.10: Age 86
Table 4.11: Experience as member of SGB 87
Table 4.12: Quintile 87
Table 4.13: Type of school 88
Table 4.14: Academic qualifications 88
Table 4.15: Experience as Chairperson of SGB 89

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 CHAPTER 1

INTRODUCTORY ORIENTATION

1.1 INTRODUCTION

The South African Schools Act (Act No. 84 of 1996) (Schools Act) prescribes how
schools should manage their funds. It also presents guidelines for the school governing
body (SGB) and the principal on their roles and responsibilities in managing the
finances of a school. There are many principals and SGB members who lack the
necessary financial knowledge and skills and are placed under incredible pressure
because they are incapable to find practical solutions to practical problems. The
management of school finances can be one of the most challenging of principals‟
responsibilities, because for many it is an area in which they have little or no training or
expertise. It is also likely that the elected members of the SGB may be equally ill
equipped for the task (Clark, 2008: 278).

1.2 BACKGROUND OF THE STUDY

Prior to 1994 various systems in education lacked both financial and management
accountability and can be ascribed to the problem of over centralisation of control and
limited legitimacy of the provincial education authorities (Thurlow & McLennon, 2003:3).
The last ten years have seen major changes in the nature of governance of schools. As
a result of new legislation in South Africa, such as the Schools Act, considerably more
authority and responsibility for decision-making has been devolved to the school level
than was previously the case. There is a move towards self-managing schools
regarding authority and responsibility to make decisions related to the allocation of
resources, including finances. Mestry (2006:27) states that, according to the Schools
Act, the governance of a public school is vested in the SGB that stands in a position of
trust towards the school.

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However, the decentralised model of school governance is not without problems.
According to South Africa Yearbook 2010/11 (2011:151), at 20% of the total state
expenditure, South Africa has one of the highest rates of government investment in
education in the world. In 2009 there were approximately 12 million learners in 24 693
public schools in the country. In 2010 the National Treasury allocated R6.16 billion to
Basic Education – of this R4 800 million is paid directly to schools via the Norms and
Standards for School Funding.

The post-apartheid school funding policies of South Africa views every school as a cost
centre and each public school principal, as a responsible manager, is expected to
accept accountability for the investment that the state makes in his or her school. The
study‟s significance revolves around principals embracing their role of responsibility
manager, assisted and supported by their school governing bodies, tasked with leading
their schools towards self-reliance.

Chisholm, Motal and Vally (2003:246) state that although decentralisation allows school
stakeholders to participate at a level in which they can have direct impact on matters
that concern them, it also allows different capacities and inequalities of power and
influence at that level to be expressed more strongly. According to Mestry (2006:28),
management of school finances is an integral part of effective school management and
it is essential that school principals and members of the SGB are trained to deal with
these financial issues.

1.3 PROBLEM STATEMENT

There are SGB members and principals who have little knowledge of the contents of the
Schools Act with regard to the financial aspects therein, with the result that too many
schools are falling victim of mismanagement or misappropriation of funds in the form of
embezzlement, fraud and theft.

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The problem to be investigated focuses mainly on the possible lack of financial
management skills of SGB members and/or principals, which result in an inability to
control the funds of the school properly. The Schools Act states that although the
Department of Basic Education provides training for SGBs in financial management,
problems in many schools have not abated and in instances where financial problems
have been taken up with school districts in the Department of Basic Education, many of
these problems remain unresolved.

Mestry (2003:26) states that many school principals and SGB members are placed
under tremendous pressure to manage their school finances. They are unable to
construct practical solutions to financial problems, mostly on account of their lack of
financial knowledge, skills and expertise. In many instances it has been reported that
school principals and SGBs have been subjected to forensic audits by the Department
of Basic Education due to the mismanagement of funds through misappropriation, fraud,
pilfering of cash, theft and improper control of financial records (Samayende & Arnstein,
2003:8; Khumalo & Mbanja, 2002:1; Khangale, 2002:13).

1.3.1 Research questions

Research questions that emanate from the research problem include:

 What are the essences of financial school management?

 What is the impact of policy related documents on the financial management in
schools?
 What are the possible problems experienced regarding the management of
school finances?
 What possible solutions with regard to financial management in schools can be
brought forward?

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1.4 AIM AND OBJECTIVES OF THE STUDY

The aim of this study is to establish the effectiveness of financial management in

schools in the Lejweleputswa education district.

In order to reach this aim, the following objectives should be realised by the study:

 to ascertain the essences of financial school management;

 to investigate the impact of related policies on financial management in schools;
 to determine the extent of possible problems that schools experience regarding
financial management; and
 to determine possible solutions for ineffective financial management in schools.

1.5 PRELIMINARY LITERATURE REVIEW

Mestry (2006:27) states that major changes in the nature of governance of schools have
been proposed and implemented in South Africa. As a result of new legislation, such as
the Schools Act, considerably more authority and responsibility for decision-making has
been devolved to the school level than was previously the case.

According to Campher, Du Preez, Grobler, Loock & Shaba (2003:36), the financial
management of a school must be organised if it is to be effective. An organisational
structure must be put into place if one does not already exist. It is also wise to re-
educate existing structures, particularly in the context of the many changes that have
occurred in the South African education system. A school must function within such an
organisational structure. This implies that there must be an understanding of authority
in the school as well as a delegation of authority. The concept of authority goes hand in
hand with the concept of responsibility. Responsibility means that people will carry out
given duties to the best of their ability.

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Mestry (2006:28) asserts that the Schools Act prescribes how schools should manage
their funds. Guidelines for the SGB and the principals on their roles and responsibilities
in managing the finances of the school are also provided in the Schools Act. According
to Section 20 of this Act, the SGB must be involved in all the financial functions of the
school. The mandatory functions include policy issues such as adopting a constitution,
drafting a mission statement, drawing up policies such as an admission policy and
relevant to this study, also a financial policy.

According to Schreuder and Landley (2001:39), schools obtain finances from three main
sources: government funding, school fees and special fundraising campaigns.
Provincial education authorities divide funds according to the National Norms and
Standards for the funding of schools and each school‟s share is calculated on the basis
of the physical condition of the school, the relative poverty of the community (social
economic factor) and the relative poverty of the school. In calculating the allocation
made to a school, social-economic factors and the relative poverty of a school are each
given a weighting of 50%. The SGB is given full responsibility of managing these funds
allocated to the school, such as establishing school fees, preparing an annual budget,
collecting and administering school fees, keeping the financial records, appointing an
accountant and supplementing the school resources (Landley 2001:39).

A school is therefore part of a system. Financial school management is thus not simply
economics and accounting as applied to schools. It is a broad field of study that
touches on many disciplines as part of the education system. In order to understand
and apply school financial management, it is necessary to have an understanding of the
school context, basic accounting procedures, economic policies, the law relating to
education and schools, as well as management skills such as planning, reporting
procedures and leadership (Campher et al., 2003:2).

According to Dunn (2005:70), internal controls are an integral part of careful financial
management in every school setting. Internal controls provide a system of checks and
balances to detect financial errors and irregularities in a timely fashion. Most internal

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controls are designed and used as measures to prevent mistakes from occurring or to
correct operational or recording errors. Financial accounting is an essential component
of the financial management of a school. A school needs to process, analyse and
interpret financial data and information in order to function effectively (Campher et al.,
2003:2).

1.6 DELIMITATION OF THE STUDY

The research study will be based in the field of Educational Management and will be
conducted in the Lejweleputswa education district.

1.7 LIMITATION OF THE STUDY

This study will not include other education districts in the Free State province.

1.8 CONCEPT DEFINITIONS

1.8.1 Financial efficiency

Financial efficiency refers to the allocation of financial resources to the school in such a
way that the allocated resources, once deployed, will match the financial needs of the
school (Mahishane & Botha 2004:96).

1.8.2 Assets and liabilities

Assets, which are possessions, are the resources controlled by an organisation (such
as a school) and from which future benefits are expected (Kerdachi, Kriel & Viljoen,
2005:11). In the context of the school environment, examples of assets would be Cash
in the bank, class and office furniture and equipment, textbooks and vehicles.

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Kerdachi et al. (2005:11) further define liabilities as the obligations of a school arising
from past events. They have to be paid, which result in an outflow of resources from the
organisation. Examples are loans from banks, bank overdraft and accounts held by the
school at shops or suppliers (creditors).

1.8.3 Financial planning (budgeting)

Campher et al. (2003:19) explain that financial planning is normally done for the period
known as financial planning year. A budget is a document showing the estimated
income for a specific financial year and everything that must be financed with that
income.

1.9 CONCLUSION

A background information on the factors that lead to the research was provided. The
problem to be investigated was stated, as well as the research questions derived from
the problem. The aim and objectives to drive the study were given and the research
design and methods to be used were provided.

The next chapter focuses on extensive literature review on financial management in

schools.

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 CHAPTER TWO

LITERATURE STUDY: FINANCIAL MANAGEMENT

2.1 INTRODUCTION

According to Gitman (2003:4), finance is the art and the science of managing money
and is concerned with the process, institutions, markets and instruments involved in the
transfer of money among individuals, institutions (including schools) and governments.

The directive of the Free State Department of Basic Education (FSDoBE) (Five year
Strategic plan) (2005-2010:11), is to contribute to the overall strategy of the Free State
by putting more emphasis on priority to invest in the development or improvement of the
community. This strategic plan and the South African Schools Act (SASA), (Act No 84
of 1998), state that provision is made for a standardised system for the institution,
governance and financial support of the school. This system promotes quality and
democratic supremacy and aims to ensure that all learners have right of access to
quality education without discrimination. The FSDoBE (2005-2010:1) further states that
the SASA provides for two types of schools, namely self-governing schools (private
schools) and public schools - and the provision in the SASA for school governance and
administration through the School Governing Body (SGB) is in place in all public
schools. School funding and norms and standards outlined in SASA prioritise, rectify
and target poverty with regard to the allocation of funds for the public schooling system.

The literature for this chapter begins with a short discussion of general management
concepts deemed necessary in the running of all organisations and institutions (such as
schools).

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2.2 GENERAL MANAGEMENT CONCEPTS

According to Hellriegel, Jackson and Slocum (2005:7), management includes the tasks
and activities involved in directing an organisation or institution. General management
rests on four main pillars, namely; planning, organising, leading and controlling.
Hellriegel et al. (2005:8) further mention that management involves designing and
carrying out plans, getting things done and working effectively with people. Viba and
Brevis (2002:3) concur when stating that the term management refers to getting things
done, effectively and efficiently, through and with other people. The “things” include
utilising the resources of the institution in such a way that the school can achieve its
goals.

De Beer and Rossouw (2005:4) agree that management is the process of utilizing an
organisation‟s resources to achieve specific objectives through the functions of
planning, organizing, leading and controlling. Management is seen as a process, which
is depicted in the next figure.

Figure 2.1: The four fundamental management tasks

Planning

Organising

Leading

Control

Source: Du Toit (2007:130)

Management is therefore a dynamic process, consisting of ongoing, related activities

and tasks. The four main pillars of management are now discussed in short.

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2.2.1 Planning

Planning is the starting point of the management process. It is that basic element of
management that determines in advance what the organisation wants to achieve and
how this goals/objectives can be attained. Planning involves all those management
activities which deal with setting the organisations goals/objectives and determining how
these can be achieved (De Beer & Rossouw, 2005:10). In the context of this study it
relates to the planning of financial matters of a school.

According to Nel (2000:160), planning is the most important element of any activity and
without it there will be no goals towards which the staff can work. Planning is thinking
ahead and anybody who plans anything (also school finances) must ask questions such
as why, what, when, where, who and how. The answers to these questions will then
determine the way forward.

2.2.2 Organising

According to Strydom (2009:77), organising means coordinating activities so that

objectives can be achieved. As a management task, organising is mainly concerned
with the classification and allocation of activities to divisions, the creation of posts within
these divisions, and the determination of an employee‟s duties, responsibilities and
authorities.

Hellriegel et al. (2005:9) further mention that organising is the process of deciding
where decisions will be made, who will perform what jobs and tasks and who will report
to whom. Smit and De J Cronje (2004:191) state that the organising process involves
dividing the work of the organisation; allocating it logically to business units,
departments and sections; delegating authority and establishing coordination,
communication, and information systems to ensure that everyone is working together to
achieve the goals of the organisation. The task of dividing the work, allocating
responsibility, is referred to as the design of the organisational structure.

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According Smit and De J Cronje (2004:191), organising is the process of creating a
structure for the organisation that will enable its people to work effectively towards its
vision, mission and goals. Organising school finances adheres to the above as
structures such as financial committees are put in place in order to fulfil the organising
task of financial management of the school.

2.2.3 Leading

Lewis and Goodman (2004:7) assert that managers must be capable of leading their
subordinates towards the accomplishment of the organizational goal. To be effective
leaders, managers must understand the dynamics of individual and group behaviour, be
able to motivate their subordinates, and be effective communicators.

Leadership is a crucial success factor and determines the future of an organisation such
as a school. The leadership style that the leader adopts will determine the climate,
values, growth and development of staff members. For principals to be effective leaders
in schools, they must develop their own leadership practice and brand of leadership,
because schools are unique (Moloi, 2005:78). Similarly, the chairperson of the SGB
plays a leading role in terms of the leadership provided in the financial affairs of the
school. Part of being a good leader is to be able to delegate, which is now discussed.

2.2.3.1 Delegation

One of the most challenging skills that successful managers must have is the ability to
delegate effectively (Lewis & Goodman, 2004:265). According to Corwin (2005:27),
delegation is an essential strategy that many new administrators, such as principals,
have difficulty putting into practice, yet it is an effective way to save time and enhance
leadership capacity at all spheres within the school.

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Delegation refers to the process of transferring the responsibility for a specific activity or
a task to another member of the organization and empowering that individual to
accomplish the task effectively. The financial aspect of a school is normally handled by
the financial committee as a delegated committee of the SGB.

To be able to be a successful leader good communication is necessary.

2.2.3.2 Communication

Van Deventer and Kruger (2003:156) explain that communication can be described as a
message conveyed by a sender to a recipient either verbally or non-verbally, with
regard to activities, management tasks, and/or relationships between staff, parents and
learners and the school. Van Deventer and Kruger (2003:156) further explain that if one
looks at communication from a management point of view, it may be seen as the
primary method by which the education leader can influence groups and individuals and
convince them to do their best for the school.

Campher (2003:32) indicates that the main aim of communication is the exchange of
ideas and the interpretation of messages. Communication is an essential managerial
instrument that educational leaders (also SGB chairpersons) use to inform, interpret,
explain, express feelings, exchange ideas, give orders and solve problems. The last
aspect of being a good leader to be discussed in this section is motivation skills.

2.2.3.3 Motivation

According to Van Deventer and Kruger (2003:148), motivation may be defined as the
influencing of a subordinate to achieve the aim that the manager wants him or her to
achieve. Schreuder and Landey (2001:100) state that the term motivation is derived
from the Latin word “movere”, which means to move or set in motion.

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According to Bisschoff and Mestry (2007:153), motivation is the management task
involving the use of all the forces that will influence personnel to act willingly towards
achieving the school‟s objective.

Figure 2.2: Motivation process

Need Drive Goal

(Motivation)

Source: Van Deventer and Kruger (2005:149)

According to Van Deventer and Kruger (2005:149), the motivation process consists of
three interdependent elements:

Need: In the context of this study this can relate to a financial need of the school.
Drive (motivation): People (such as teachers and patents) need motivation (or drive) to
achieve an aim (i.e. the fundraising projects as planned by the SGB).
Goal: The achievement of the goal. This is a future state or condition that contributes to
the fulfilment of the organization‟s mission (as drawn up by the SGB of the school). The
last of the four pillars of management to be discussed is control.

2.2.4 Control

Nel (2000:37) explains that control is the function of making sure that activities and
instructions are carried out according to plans and standards, while dealing with any
deviations that need remedial action. Control is undertaken at different stages and it is a
continual process to ensure that things are still on track as planned. Control is exercised
when management ensures that its plans and instructions are carried out. A
management function system is used to check on and measure employees‟

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performance, and to compare this performance with the set standards and objectives
(De Beer & Rossouw, 2005:12).

A principal as leader, as well as the SGB as body, needs to employ all these
management principles in order to successfully manage the finances of a school.
Funding of schools by the government and financial management in schools are looked
into in the next sections.

2.3 SCHOOL FUNDING

According to Bischoff and Mestry (2007:20), public schools are funded by the state
according to the SASA. The authors further mention that the state must fund public
schools from public revenue on an equitable basis in order to (1) ensure the proper
exercise of the rights of learners to education and (2) the redress of past inequalities in
education provision. The state must, on an annual basis, provide sufficient information
to public schools regarding the funding referred to in Sub-section 1 of the SASA to
enable public schools to prepare their budgets for the next financial year.

Van Deventer and Kruger (2003:234) assert that education is mainly funded by the
following two sources:

 Private or individual funding: this includes school fees contributed by parents and
various costs paid by learners and parents, e.g. transport, textbooks and school
uniforms; and
 Public funding: This refers to the responsibility of the state to fund public schools
from public revenue on an equitable basis.

Joubert and Prinsloo (2001:50) explain that the state bears primary responsibility from
the funding of public schools out of public revenue. Public funding refers to the
responsibility of the state to fund public schools from public revenue on an equitable
basis. Anderson and Lumby (2005:9) state that in attempting to build a national system

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for schools, the South African government is confronted by two challenges in particular,
in respect of school funding:

 there is a pressing need to effect redress and equity, with the aim of
progressively improving the quality of schooling, especially with regard to those
schools that have been substantially disadvantaged as a consequence of past
policies; and
 although the government subscribes to the aim of free education for all, it is
forced to acknowledge that such provision is beyond its means.

One of the key points set out in the SASA is that all stakeholders in education must
accept their responsibilities concerning the organisation, governance and funding of
schools (Joubert & Prinsloo, 2001:19). A further basic aim of the SASA is that the
quality of education of all learners must be improved by way of better facilities, better
trained educators, and better methods of teaching, as well as better school conditions
(Bisschoff & Mestry, 2007:19). To address better conditions for schools, the norms and
standards of school funding were generated and are discussed in the next sub-section.

2.3.1 Norms and standards of school funding

Chisholm (2003:473) mentions that the funding norms are divided into six categories
which is: new construction, immovable capital, improvements, recurrent cost and non
teaching personnel cost. Chisholm (2003:506) further mentions that the Department of
Basic Education passed the National Norms and Standards for School Funding
(Government Gazette no 19347) as part of SASA (Act No. 84 of 1996) and the National
Education Policy Act (Act No. 27 of 1996). Through the resource targeting of schools,
the new funding policy is part of the social context in which schooling occurs and
acknowledges the reality that most of this happen in impoverished settings.

This policy document sets out the national norms and minimum standards for school
funding in terms of the SASA and it also deals with the procedures to be adopted by the

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provincial education departments in determining resource allocation to their schools.
Bisschoff and Mestry (2007:47) state that these norms and minimum standards deal
with:

 the public funding of public schools in terms of Section 35 of SASA ;

 the exemption of parents who are unable to pay school fees, in terms Section
39(4) of the Act; and
 public subsidies to independent schools in terms of Section 48 (1) of the Act.

According to Weber (2002:278), norms and standards have aimed at ensuring that in
recurrent cost allocation, a very small percentage of the total budget will target
resources on the basis of need. The amended National Norms and Standards for
School funding (2004) state that schools serving the poorest communities in South
Africa are declared “no fee paying schools”. In these schools, school fees cannot be
charged. The criteria for the pronouncement of no fee schools are determined and
amended by the minister from time to time and are based on the poverty level of
communities and the level of state funding. Automatic exemptions will apply to learners
who receive poverty linked social grants i.e. the child support grant.

As funding for schools change, the management of funding also changes.

Decentralisation of school funding is discussed in the next sub-section.

2.3.2 Decentralisation of school funds

Marishane and Botha (2004:96) state that educational reform in a democratic South
Africa has been highlighted by the introduction of the SASA of 1996 (Act No. 84 of
1996). Section 21 of this Act provides for the establishment of self managing schools
by permitting schools to apply for some of the functions that were traditionally carried
out by the state. These functions include maintaining school property, purchasing
learning support materials (LSM) and equipment, paying for services and determining
extramural activities.

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According to Anderson and Lumby (2005:138), many countries have devolved
considerable power to schools. This often leads to a view that increasing autonomy
should be matched by a greater emphasis on accountability. Glatter (2002:233) joins
Wohlstetter and Sebring (2000:174) in saying that school level participants trade in
increased autonomy for increased accountability. It is evident that self-management of
schools in South Africa has led to enhanced accountability, and added pressures for
principals and SGBs.

Marishane and Botha (2004:1) mention that decentralisation of financial management to

School-Based Management (SBM) has become an important strategy aimed at school
improvement. The deployment of the strategy stems from the view that when decisions
about financial control are devolved to the school, better decisions regarding the
upliftment of learners can be made. In addition, Van Deventer and Kruger (2003:235)
state that SBM is an approach whereby public schools are redesigned to provide
educational stakeholders (educators, parents, learners and the community at large), the
opportunity and power to improve and develop their schools.

Transferring financial power to the school is not enough to bring about desirable
improvements. More supportive efforts on the side of the government are needed. In
their study of SBM in the United States of America (USA), Wholstetter, Lovemore and
Brummer (2007:45) found that the task of financial management involves monitoring or
controlling the financial position of the institution. This monitoring and controlling can be
divided into three main functions, which are analysing the financial position of the
school, managing the asset structure of the school and managing the financial structure
of the school.

According to Bush and Heystek (2003:127), there has been a major shift to self
governance for schools in many countries during the past two decades. This trend
encompasses England and Wales, Australia, Canada, New Zealand, Portugal, Spain,
parts of the USA and South Africa. The authors further mention that there is a

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considerable diversity in the forms of self governance adopted in these countries, but
they are generally underpinned by ideas of democracy and school effectiveness.

Decentralisation of financial control to SBM has become an important strategy aimed at

school improvement in South Africa (Marishane & Botha, 2004:95). Van Langen and
Dekker (2001:381) add that decentralisation is designed to bring decision-making closer
to the learner and the learning environment of the classroom. Decentralisation brings
with it the possibility of extreme inequalities – the possibility that local communities,
including parents and educators, may not have the knowledge and resources to
adequately protect the quality of education provided to their children.

According to Veriava (2007:188), the amendments to the Norms and Standards of

School Funding include a new method for measuring the poverty levels of schools.
Previously two equally weighted factors were used to rate the school. The first was the
physical condition, facilities and crowding of the school. The second was the relative
poverty of the community around the school. The amendments now include quintiles to
categorise schools in terms of funding to be received. These quintiles are discussed in
the next sub-section.

2.3.3 The quintiles

Bush and Heystek (2003:130) state that schools are divided into five categories or
quintiles - with the poorest schools receiving seven times more funding per learner than
the richest schools. This approach is justifiable to address historic inequalities, but it
also increases pressure on the SGB of the schools in the top two quintiles to replace the
lost income through fees or other fundraising activities.

According to the Public Policy Guide (no date), the National Department of Basic
Education (DoBE) indicates that schools in each province are therefore classified into
five groups from the most poor to the least poor. For example: Quintile 1 is a group of
schools in each province catering for the poorest 20 % of schools. Quintile 2 caters for

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the next poorest 20% of schools, while Quintile 5 schools represent the least poor.
Schools receive money from government according to the quintile they are listed in.
Quintile 1 schools receive the highest allocation, while quintile 5 schools receive the
lowest.

Quintiles are currently still used to determine whether schools may charge school fees
or not. It is also used to differentiate the amount of funding allocated to schools in a pro-
poor manner. The following are the 2011 national quintile amounts: Q1 = R 960 per
learner; Q2 = R880 per learner; Q3 = R 880 per learner; Q4 = R480 per learner; Q5 =
R165 per learner. These amounts are a considerable improvement on the quintile
amounts in previous years (Moshega, 2010).

The National DoBE should provide each school with the following information in writing
by 30 September of each year:

 which quintile the school is in;

 what the target amount per learner is for that quintile for the next year;
 what the total school allocation for the next year for that school will be;
 how this has been calculated.

According to the Public Policy Guide (no date), the parents and the entire school
community must know in which quintile their school resort and the amount of money the
school will receive. Provincial offices should communicate this information through their
district offices to schools in writing. Should parents and the SGB think that they were not
classified under the right quintile they have the right to lodge a dispute. The provincial
and district offices must inform parents and schools of the dispute procedures to be
followed (Public Policy Guide, no date).

Van Deventer and Kruger (2003:235) mention that in South Africa the provincial
governments and legislature decide on the amount to be allocated annually to their
education departments. The provincial governments make appropriations available to

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their education departments from the total revenue resources allocated to their
provinces. According to the National Norms and Standards for School Funding (2004),
the school allocation is the amount of money provided yearly to each public ordinary
school. This allocation is used by the school to buy the necessary textbooks, stationary
and equipment and to pay for photocopies, electricity, telephone bills, photocopying,
sanitation and water.

Van Deventer and Kruger (2005:235) assert that the funding of schools occurs within
the following two cost allocation categories:

 capital cost allocations: These include allocations for new classrooms and other
building constructions (SASA, 1998:25).
 recurrent cost allocations: These include the following categories:

o immovable capital improvement and repair cost, which relate to

maintenance and repairs to buildings.
o easily reparable recurrent costs, which include supplies and services to
the school.
o other recurrent and small capital equipment costs, including learning
materials to learners (books, stationery.)
o hostel costs, where the recurrent cost allocations (transfer payments) are
targeted as far as possible on the basis of need. This is determined on the
basis of the physical condition, facilities and crowding of the school, as
well as the relative poverty of the community around the school.

A principal as leader of the school needs to employ all the management functions and
principles in order to properly manage the funding received by his/her school. Financial
management in education now follows.

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2.4 FINANCIAL MANAGEMENT IN EDUCATION

According to Oosthuizen (2003:213), financial management in education is the

distribution and use of money for the purpose of providing educational services and
producing learner achievement. Financial management in contemporary education
management aims to:

 estimate the needs of local educational training;

 obtain finances in accordance with the estimated needs;
 administers the finances thus obtained in a legally correct manner.

In order to facilitate the above, Owen (2006:54) mentions that financial numeracy is a
core skill for all managers. Most financial management skills involve the allocation of
resources and the setting of targets, expectations and priorities. The core financial skills
required by all managers allow them to successfully:

 set budgets;
 manage budgets;
 manage costs.

According to the FSDoBE (2005:21), the role of the SMT as the body that manages the
day-to-day activities of curriculum delivery at the school, is to support the SGB in
financial management. Bisschoff and Mestry (2007:154) explain that internal
communication on financial school management matters is important to ensure that all
internal stakeholders know when to make their submissions and how to spend funds
allocated to them. The budget, in conjunction with the financial policy of the school, is
the most important medium for carrying messages relating to financial school
management to the internal stakeholders (Bisschoff & Mestry, 2007:154). Financial
managers applying financial management principles in their schools as Khumalo
(2001:1) states, make use of general management functions such as planning and
controlling.

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Bisschoff and Mestry (2007:3) mention that financial management in education is the
performance of management actions (regulatory task) connected with the financial
aspects of schools, with the main aim of achieving effective education, and carried out
by a person in a position of authority. Financial management is a process of several
activities, such as identification, measurement, accumulation, analysis, preparation,
interpretation, and communication of information (both financial and operational).
Financial management at a school is a process of ensuring that the SGB and the SMT
(with the principal as head) plan, organise, delegate and control the funds of the school
in such a way that it achieves its goals.

According to Campher (2002:2), financial management in education is economics and

accounting as applied to schools, as well as a broad field of study that touches on many
disciplines as part of the system. All school financial decisions should be made with the
school‟s best interest in mind. The principal, as well as the SGB has an integral role to
play in school finances. The next three sub-sections deal with this aspect.

2.4.1 The role of the principal as financial manager

Urba and Brevis (2002:4) state that during the course of their daily work, principals
typically fulfil several roles. A role is a set of expected patterns of behaviour associated
with a given position in an organisation or a school. According to Hellriegel et al.
(2005:4), the principals under the direction of their district, take a leadership role in the
daily operation of a school. Principals are responsible for the organisation and
management of individual schools.

Mestry (2004:128) mentions that in terms of financial matters, the principal should have
various kinds of school accounts and records kept properly and should make the best
use of funds for the benefit of learners in consultation with the appropriate structures.
The principal sees to the day-to-day management of the school and has to implement
many directives and policies formulated by the DoBE and the SGB.

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Functions of the financial manager, such as the principal, are:

 to make sure that they adhere to correct procurement procedures which is fair
and transparent;
 to put in place a system or structure that will coordinate the assessment of all big
capital projects correctly, preceding a final decision that is made on the project;
 to accept responsibility for the effective, well-organized reasonably priced and
translucent use of the assets and funds of the school; and is also accountable to
gather all money that is owed to or payable to the department; to stay away from
unofficial, unbalanced, unrewarding and wasteful expenditure and losses
resulting from illegal behaviour.

The principal as accounting financial officer is liable for the supervision, including the
safeguarding and maintenance of the resources, and for the administration of the
liabilities of the school, and also to administer accessible working capital efficiently and
economically. When a learner is admitted to a public school, the principal must notify
the parents of the following (Government Gazette, 2006: No.29311):

 the amount of the annual school fees to be paid and procedures for applying for
exemption;
 the fact that the parent is liable for the payment of school fees unless he or she
has been exempted from the payment thereof;
 the SGB must treat as confidential all information that a parent provides in
support of his or her application, and may not reveal such information to a third
party without the consent of the parent, except the HOD or his or her delegate.

Apart from the principal, the SGB of a school has foremost authority regarding the
finances of a school.

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2.4.2 The role of the school governing body (SGB)

According to Bush and Heystek (2003:127), the democratic motivation for the SGBs is
at its most powerful in South Africa. Governance is only one dimension of a commitment
to democratic institutions influenced by an understandable reaction to the injustices and
iniquities of the past. Bisschoff and Mestry (2007:46) mention that in order for the
educational authorities to maintain consistency as well as to ensure basic standards,
guidelines have to be set for every SGB to adhere to.

Bush and Heystek (2003:132) add that one of the most important functions of SGBs is
the provision to set a budget and to recommend school fees as part of the budgeting
process. Mabasa and Themane (2002:111) assert that whereas school governance
used to be characterised by authoritarian and exclusive practices, the SASA requires
broad and democratic participation by parents, teachers and learners in the life of the
school through the medium of SGBs.

Although the SASA is discussed as a sub-section in this chapter, it is inevitable that

some overlapping occurs regarding the SASA and the role of SGBs. According to
Mestry (2004:128), Section 37 of the SASA states that the SGB must establish a school
fund and administer it in accordance with the directions issued by the provincial head of
department. The SASA provides guidelines for the SGB and the principal on their roles
and responsibilities in managing the finances of the school.

Mestry (2004:130) also states that the SGB must ensure the existence of and the
effective execution of a sound, firm financial policy and also management procedures.
Subject to the SASA, the SGB may apply to the Head of Department of the province, in
writing to be allocated any of the following functions:

 to maintain and improve the schools property, and buildings and grounds
occupied by the school, including school hostels, and where applicable;
 to purchase textbooks, educational materials or equipment for the school; and

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 to pay for services to the school.

Mxuma (2006:24) asserts that the duty of the SGB is to exercise the power detailed in
the articles of government to support the efficient conduct, development and welfare of
the individual school. In the exercise of their duties the SGB is to be accountable for:

 the local education authority which may require reports from the SGB and has
the power to take steps which may be necessary to prevent the breakdown of
discipline or to ensure effective financial management in the school; and
 the parents to whom the SGB is required to present an annual report to be
discussed at the annual parents meeting.

SGBs of public schools are also required to:

 take all reasonable measures within their means to supplement the resources
supplied by the state, with the objective of improving the quality of education
provided for the learners (SASA, Section 26);
 establish a school fund into which all monies received by the school must be
paid. The school funds must be administered in accordance with directions
issued by the DoBE (Joubert & Prinsloo, 2001:50).

Goniwe (2005:24) states that financial management is a sensitive issue and it is thus
important that the SGB remember the following values:

 openness and transparency;

 responsibility;
 accountability.

Oosthuizen and Botha (2002:207) state that the SGB must endeavour to obtain
additional funds (SASA, Section 36) to improve the quality of education in the school.
This section therefore leaves room for SGBs to devise strategies to obtain additional

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funds from parents, the community and private institutions to benefit the learners.
Karlsson (2002:331) agrees that the SGB of a public school must take all reasonable
measures within its means to supplement the resources supplied by the state in order to
improve the quality of education provided by the school to all learners at the school.

The SASA emphasises a partnership between the parents and the government, and
aim ultimately to devolve maximum decision making and power from education
departments to SGBs. The full control of funds in schools has become the responsibility
of the SGB, while the state, apart from requiring a copy of the school‟s annual audited
financial statements, has very little influence on the school finances (Bisschoff & Mestry,
2007:16).

2.4.2.1 The composition of the SGB

Joubert and Prinsloo (2001:45) indicate that the SGB is a constitutional (legal) body of
people who are elected to govern the school and they represent the school community.
The SGB of a public school is made up of three groups of people, namely:

 members who are elected;

 the school principal (ex-officio member); and
 members who are co-opted, but not elected.

Anderson and Briggs (2001:99) mention that the actual size and composition of the
SGB of a publicly funded school are usually laid down in legislation and are dependent
on the size and type of school. For example, in publicly funded schools in South Africa,
parents must be the majority group of governors with voting rights, and in secondary
schools learners may also be represented. In addition, SGBs comprise of educators,
the principal and co-opted members (who do not have voting rights).

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The FSDoBE (2008:20) mentions that all members of the SGB, except learner
members, are expected to be in office for three years. A learner may not serve for
longer than one year in the SGB unless he/she is re-elected.

2.4.3 School finances - the link between the SGB and the principal

Van Deventer and Kruger (2003:242) state that an important characteristic of the
present approach to education management in general and financial management in
particular, is the emphasis on transparency and information sharing among all
stakeholders. For the school principal and SGB this means that they must deal with
funds in a responsible manner and that they are accountable to the parents, the
learners, the community and the DoBE. Van Deventer and Kruger (2003:243) mention
further that to be able to provide a clear picture of the state of a school‟s finances, the
principal should see to it that monthly and quarterly statements are kept.

According to the FSDoBE (2008:27), the SGB needs to monitor the budget of the school
during the year. This means that they need to check that expenditure and income stay
more or less in line with the budget. A good way to ensure that this happens is for the
treasurer to prepare a budget control statement for each meeting of the SGB. Mestry
(2006:35) states that the SGB and principal must be trained in financial management by
the School Management and Governance Developers (SMGD) or external service
providers. There is a correlation between sound financial management and efficient and
effective SGBs. Training in financial management is very important in preparing and
capacitating school principals and Finance committee members of the SGB with
financial skills (Bush et al., 2004). Where the provincial DoBE is unable to provide
training due to financial constraints, schools can take the initiative by forming a
partnership with higher education institutions or may use external service providers that
offer training in financial management to train all members responsible for the finances
of the school. Such training should enable the SGB to be responsible and accountable
for funds that have been received and utilized for the attainment of specific school

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objectives. It must also capacitate them to make a contribution towards the
improvement of the overall quality of teaching and learning.

According to Bisschoff and Mestry (2007:3), for a school to function economically (that
is, using resources carefully to avoid expenditure above a reasonable level) and
efficiently (that is achieving the best possible results relative to spending), school
financial governance through the SGB must be knowledgeable regarding:

 the amount of money in the bank account;

 the money that is still needed and why it is needed;
 how and where will it get the money it still needs; and
 how the money will be spent.

The FSDoBE (2005:2) states that before handling finances, the SGB should be aware
of the following principles:

 a working knowledge of all the relevant legislation, such as SASA and the PFMA
(Public Financial Management Act).
 working knowledge of guidelines such as departmental circulars;
 understanding of the purpose of a budget;
 the necessity of policymaking;
 setting up of necessary structures e.g. Finance Committee, to take charge of
finances;
 understanding and monitoring of dates important for different processes; and
 putting monitoring mechanisms in place and reporting to parents.

In addition Anderson and Briggs (2001:1) state that the SGB and principal are likely to
be involved in some, or all, of the following activities:

 preparing a budget for the school;

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 considering and controlling the costs of certain educational activities;
 deciding resource allocation within the school or department;
 securing additional funding and/or resources for the school through
entrepreneurial activities;
 responding to the needs and concerns of parents;
 developing and maintaining links with local business, industry and commerce;
 preparing and implementing a marketing strategy for the school; and
 accountable for delegated spending and demonstrating values for money.

Khumalo (2001:1) asserts that all decisions made by financial managers have financial
implications and therefore the financial manager or the principal as the accounting
officer has to consider whether the decisions made are realistic with regard to the size
of a school. At the same time, progress or improvement should not be delayed by
budget problems.

2.4.4 The school finance committee

Bisschoff and Mestry (2007:36) mention that a Finance Committee should be formed to
assist the SGB in handling the financial matters of the school. Campher (2002:52)
states that according to Section 30(1) of the SASA, the SGB may establish committees
including a finance committee and executive committee, appoint persons who are not
members of the SGB to such committees on the basis of their expertise, and each
committee must be chaired by a member of the SGB.

Mestry (2004:131) mentions that where members of the SGB have no or little financial
knowledge, the SGB should ask for the services of an expert with sound financial
knowledge from the parent community. It is vital for this committee to conduct regular
meetings to discuss financial matters and its members must be committed to carrying
out their responsibilities

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The KZNDoBE (no date:iv) states that the finance committee helps the school by
providing a range of “high level” functions: The finance committee will:

 keep overall control of school money.

 draw up the budget each year.
 approve all expenditure - if it fits the budget.
 advise on ways of fundraising.
 assist in drawing up annual financial statements.
 check financial records internally.
 suggest who should be appointed as the auditor.
 advise the SGB on amount of school fees.
 advise the SGB on exemptions on school fees.

According to Bisschoff and Mestry (2007:65), the composition of the finance committee
may consist of the treasurer, principal, educators, parents (not necessarily from the
SGB), and non teaching staff. It is advisable that at least eight members make up this
committee, with a SGB member as chairperson. Mxuma (2006:26) states that the
treasurer must keep accurate records of all transactions and prepare document for the
auditors.

2.4.4.1 The role of the school finance committee

According to Goniwe (2005:20), the finance committee is responsible for monitoring

income and expenditure in a school. This committee should ensure that:

 records are kept;

 there is accountability and responsibility for all funds/fundraising activities;
 there is an independent audit; and
 the SGB is informed and approves of the financial statements.

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The role of this committee will be made much easier with the existence of a financial
policy at the school. This financial policy may differ from school to school, but should be
used as the guideline for all financial matters at the school (Mestry, 2006:35). A good
financial policy identifies and articulates the values and the basic principles to be
applied to specific needs in schools. A financial policy should not only set direction, but
should also give direction. It is therefore essential that all stakeholders involved in the
financial matters of the school to be directly involved in the drafting and implementing of
the school‟s financial policy.

According to Bisschoff and Mestry (2007:126), the financial policy is seen as a

document that may be changed over time. The starting point of a financial policy lies
with the mission statement of the school. The formulation of rules and regulations for
controlling the money or the assets of the school must be stated clearly in the financial
policy of the school.

Decentralising financial management in schools is driven by certain legal aspects.

Some of these are discussed in the next section.

2.5 LEGAL ASPECTS OF FINANCIAL SCHOOL MANAGEMENT

As previously mentioned, some overlapping may occur in the discussion of the SASA as
legal framework guiding school finances and the role of the principal and SGBs
(discussed earlier). This is however kept to the minimum.

2.5.1 Legal frameworks

School finances are mainly guided by the SASA, but Mkhize and Ajam (2006:761)
mention that the promulgation of the Public Financial Management Act (PMFA) (Act 29
of 1999) was seen as a milestone of budget and financial reform in South Africa.

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The main aims of the PFMA are:

 to regulate the financial management in the public sector;

 to ensure that all revenue, expenditure, assets and liabilities are managed
effectively and efficiently; and
 to provide for the responsibilities of persons entrusted with financial
management.

According to Oosthuizen and Botha (2002:206), the legal requirements regarding

management activities (apart from the PFMA), particularly those related to financial
management, are found in a number of sections of the SASA.

 Section 12(1) determines that the provincial minister must provide public schools
for the education of learners out of funds provided for this purpose by the
provincial legislature.
 Section 20(1) determines that the SGB of the school must administer and control
the property of the school as well as the buildings and grounds occupied by the
school, including the hostels were applicable.
 Section 20(2) determines that the SGB may allow the reasonable use of facilities
of the school for community and social purposes as well as for school fee
collection.
 Section 34 determines that the state must fund public schools on an equitable
basis, while Section 35 state that the Minister of Education, after consultation
with the Council of Education Ministers, the Finance and Fiscal commission and
the Minister of Finance, must determine norms and minimum standards for the
purpose of funding of public schools.
 Section 44 determines that the financial year of a public school commences on
the first day of January and ends on the last day of December of each year.

According to Joubert and Prinsloo (2001:15), the Constitution (Act 108 of 1996) took
effect on 4 February 1997. South Africa has a long history of Apartheid and other forms

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of unfair discrimination in education. In the past, there were differences and unequal
school and education systems based on ethnicity, race and colour. One of the basic
aims of the SASA is to transform education by creating and managing a national school
system in South Africa. This system must, as far as reasonably possible, give everyone
an equal opportunity to develop the talents of all learners (Joubert & Prinsloo 2001:19).
Campher (2003:40) mentions that the main aim of the SASA was to introduce a system
that would, inter alia, promote democratic change in the community, integrating various
school models into one model that should be acceptable to all and grant equal
opportunities to all. Campher (2003:40) further mentions that the SASA protects the
diversity of culture and language, as well as the rights of learners, parents and
educators.

According to Joubert and Prinsloo (2001:19), the general purpose of the SASA is:

 eliminating poverty through proper education;

 establishing a human rights culture to advance the democratic transformation of
society;
 ensuring respect for and protection and advancement of various cultures and
languages; and
 establishing a partnership between all stakeholders who have an interest in
education, i.e. the state, parents, learners, educators and other members of the
community in the vicinity of the school.

Van Deventer and Kruger (2003:236) further explain that the SASA makes provision (by
means of Article 21), for public schools to become more responsible for managing
certain functions themselves. Managing of school finances is discussed in the next sub-
section.

2.5.2 Managing school finances

This sub-section discusses various aspects of the management of school finances.

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2.5.2.1 Financial recordkeeping and control

According to Oosthuizen (2003:214), the SGB has the responsibility to keep a

comprehensive record of funds received and spent and of assets, liabilities and financial
transactions. Bischoff and Mestry (2007:37) mention that, according to Section 42 of
SASA, schools must keep financial records and statements. The SGB of a public school
must:

 keep a record of funds received and spent by the public school and its
assets, liabilities and financial transactions; and
 as soon as possible, but not later than three months after the end of each
financial year, draw up annual financial statements in accordance with certain
guidelines.

According to Marishane and Botha (2004:105), in budget reporting the school-based

management structures (SBMS) gathers, processes and supplies detailed financial
information. Financial information is communicated in the form of short term and long
term financial statements and reports and it indicates the school‟s revenue and
expenditure. Xuma (2006:36) states that the SASA places a duty on the SGB to keep
written record of everything that has to do with money or property of the school. This
means that all the money that the school receive must be written into financial
statements or recorded or entered into the computer. There must be an asset register
in which all the property that belongs to the school is written down. This will contain a
list of everything of which the school is the owner of. If the school buys or receives
something new, it must be entered into the record immediately.

The KZNDoBE (no date:iv) states that the overall responsibility for the control of school
money lies with the SGB of the school. Usually the principal of the school is the
“accounting officer”. According to Van Deventer and Kruger (2003:242), financial
control includes the following tasks:

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 drawing up criteria to ensure that the school‟s resources are mobilised
effectively;
 monitoring and evaluating the school‟s financial progress;
 initiating corrective action if needed;
 determining financial procedures;
 collecting money;
 financial reporting; and
 accountability.

Conradie and Fourie (2002:9) put forward four steps in financial control, which are:

 determining performance criteria, i.e. drawing financial budget and planning what
should be done;
 measuring the actual performance or the concrete results, i.e. setting up a
bookkeeping system, with regular reporting outputs; and
 comparing the expected with the actual performance.

Van Deventer and Kruger (2003:242) mention that monitoring entails keeping a check
on the difference between the planned financial status at any given time and the actual
financial status at that time. Monitoring and control involves the following:

 drawing up a plan (for the revenue and spending) for the whole year, and
identifying positive and negative differences;
 checking expenditure against the budget allocations;
 evaluating and reorganising if and where necessary;
 noting if there is a surplus or shortage at the end of the year and whether there is
any possibility of building reserves;
 controlling and checking expenditures by means of monthly statements, quarterly
statements and the annual report.

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Campher et al. (2003:40) state that there has been a shift in emphasis from external
reporting and accountability to transparency and information sharing amongst all
stakeholders. In keeping with the concept of sharing information amongst all
stakeholders, the following things must be done:

 the area of accountability for school finances must be increased. Staff, learners,
parents, the business community and the community in general must be
included.
 staff, learners and learners‟ parents should be made aware of the financial
control process, so that they are informed of what is happening in the school.
This will allow them to utilise the school resources for the maximum benefit of the
school rather than trying to achieve only efficient resource utilisation.
 decision-making should be done more collectively rather than only at
management level. Cooperative financial school management will lead to
collective leadership and practices involving all stakeholders.
 there must be a trusting and cooperative relationship amongst all the
stakeholders as opposed to an atmosphere of mistrust, division and exclusion. A
new type of relationship must be established by means of consultation and
ongoing discussion so that an agreement can be reached.
 Financial information should be made available to all stakeholders.

Campher et al. (2003:41) further mention that for a budget to have value and be
effective as a financial management tool, it must be controlled. Budget control should
include the following functions:

 comparison between the amount budgeted and the results achieved;

 analysis and interpretation of discrepancies;
 auditing and calculations;
 accounting and reporting; and
 implementation of corrective measures.

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Bisschoff and Mestry (2007:168) assert that poor management of cash at school can
cause considerable unhappiness amongst the role players and neither the state, nor the
donors or the parents want to see their hard-earned money being mismanaged.

2.5.2.2 Cash management

According to Westerfield and Firer (2001:30), cash flow is the difference between the
number of rands that came in and the number that went out. Cash resources of a
school include money, such as coins and notes and negotiable instruments such as
cheques and postal orders as well as funds held at banking institutions.

Bisschoff and Mestry (2007:168) state that for effective cash management at school, the
SGB must receive regular reports on:

 the cash flow position on a monthly basis;

 unexpected and sudden changes in the cash flow and the precautionary
balances; and
 projections of the expected cash requirements and the cash flow.

Goniwe (2005:129) portrays guidelines on the handling of cash and petty cash. Schools
must have an agreed policy for handling the receipt of cash payments. There must be a
person responsible and a system for issuing receipts/controlling the money. Security for
the handling and banking of money must be in place and monitored. Schools should
keep a small amount of money in cash to pay for cash expenditures i.e. travel, cash
purchases, etc. A certain amount of cash is kept at the school in a safe place (locked)
and is used to pay for accounts that are too small for cheque or internet payments. A
major part of the management of any finances is the drafting of a budget for the school.

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2.6 BUDGETING

According to Van Deventer and Kruger (2005:237), a budget can be regarded as a

management tool or mechanism by which the management team and the SGB can
estimate and plan, as well as utilise, coordinate, monitor and evaluate the allocated
resources of the school in financial terms. Brimley and Rulon (2008:294) state that a
budget is a fiscal plan that involves at least four elements namely: planning, receiving
funds, spending funds and evaluating results – all performed within the limits of a
predetermined time, thus, budgeting is defining priorities and needs and receiving and
spending funds over a particular period, usually a year for schools. The evaluation
aspects cover examining previous budgets in order to build better budgets for
succeeding periods.

Campher (2003:19) sees a budget as a document showing the estimated income for a
specific financial year and everything that must be financed with the income. According
to the KZNDoBE (2005:51), budgeting is an estimate of the school‟s income and
expenditure for the following year. Budgets are management tools and plans that
involve a process, and control and are indicators of performance. Thus budgets are
performance management tools, their purpose being to allocate limited resources to
unlimited demands. Budgets are financial indicators of activities for the year ahead and
indicate strategic priorities for that period (Tassiopaolos, 2005:160). Picciano
(2006:106) mentions that without an understanding of the available financial resources,
an educational leader will have difficulty moving the school forward.

According to Nieman (2006:103), the operating budget is a statement of estimated

income and expenses over a specified period of time. It is essential that items in the
operational budget be calculated with care, as this is the area where miscalculations
can have serious consequences fro the school during a financial year. Another
important aspect of the budget is the cash flow budget. Nieman (2006:103) states that
the cash flow budget is a statement of estimated cash receipts and expenditure over a

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specified period of time. Erasmus (2008:90) mentions that budgets are part of the
planning process, but also a very important controlling feature.

Bush and Heystek (2003:132) explain that the budget cannot be finalised unless it is
approved by the majority of parents present and voting at a meeting. Campher
(2003:53) mentions that before a budget can be approved by the SGB, it must be
presented to a general meeting of parents convened on at least 30 days notice, for
consideration and approval by a majority of parents present and voting. Bush and
Heystek (2003:132) state that the parents must be consulted about whether school fees
should be charged and on the level of such fees.

Table 2.1: Structuring a budget

BUDGET ITEMS Previous Previous Current Current

budget actual budget actual
Income
Funds allocated by state
School fees
Donations
Fundraising projects
Investments
Hiring of facilities, etc
Total income
Expenditure
Personnel
Administration
Stores
Equipment
Buildings/grounds/maintenance
Transport
School departments, etc.
Total expenditure
SURPLUS/DEFICIT

Source: Van Deventer and Kruger (2005:240)

The budget items are listed on the left and include all income and expenditure items of
the budget. This allows one to determine whether the school made a surplus or deficit
during a particular year. In the next column figures of the previous year‟s budget are
reflected. The second column portrays the actual amount spent last year. The third

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column indicates figures of the current year‟s budget and the fourth column the actual
income or expenditure incurred for the current year to date. At the bottom of the
structure the surplus/deficit is indicated.

According to Anderson and Briggs (2001:27), budgeting is done because:

 resources are “scarce” – one cannot do everything one want to;

 accountability is easier to put into effect regarding the funding received;
 it ensures the things that need to be done are properly resourced; and
 it allows to plan ahead.

Anderson and Briggs (2001:27) also mention that internal or departmental budgeting
within an educational organisation is one of the most important activities in the resource
management cycle. The budget is the tool for ensuring the resources required for the
educational activities that lead to the achievement of educational objectives are made
available. The budget is much more than a spreadsheet indicating income and
expenditure under different heading sections. It should be used as a means of
expressing school aims and educational proprieties in financial terms.

Anderson and Lumby (2005:69) state that the budget process begins with the review or
audit phase, which builds on an evaluation of the previous cycle. In the South African
context this analysis begins around September in preparation for the next financial year
in January. Brimley and Rulon (2008:294) state that translating educational needs into
a budget can follow the pattern of:

 identifying needs;
 establishing goals;
 organising objectives;
 building a program in meeting those objective and
 providing a budget to fund those programs.

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According to Lesley and Lumby (2005:73), there are various approaches to budgeting,
such as incremental budgeting, line item budgeting, programme budgeting, rolling
budgets, fixed and flexible budgeting and zero-based budgeting.

 Incremental budgeting: This is the most common technique used in preparing

the school budget. It is one of the two main rational approaches to resource
allocation. Incremental budgeting means the building of the yearly budget on the
previous budget. According to Ntseto (2009: 51), an incremental budget involves
an approach that uses the previous year‟s expenditure as the basis from which to
make adjustments. The previous year‟s budget is not challenged, but attention is
given to minor adjustments in the financial spending. The next school year is
assumed to be very much like the current year. School principals are expected to
project the needs for the next year on the formula that is most often based on the
number of learners anticipated to be enrolled.

 Line-item budgeting: This budget focuses on cost item of expenditure as the

unit of analysis, authorisation and control. This approach is more specific as each
line item in the budget receives separate consideration. Line-item budgeting is
also a common feaure in many schools in South Africa (Business Dictionary, no
date).

 Programme budgeting: This budget approach focuses strategically on the

school plans, identifies programmes to achieve its objectives and determines the
cost of each programme. Programme budgeting facilitates and recognise the
ways in which school activities are done and this budget system is related and
interdependent (Asantewa, 2003:14).

 Rolling budget: A rolling budget operates within a system whereby the 12

months budget of targets and resources is divided into quarterly periods (Zach,
2002:20). In this system, principals can transfer resources from one part of the

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 budget to the other without the typical problems of ownership and demotivation
found with other budget systems.

 Fixed and Flexible budgeting: Fixed budgets are designed to remain

unchanged. Flexible budgets (or variable budgets) are designed to show how
budget figures change with levels of activity. This provides a meaningful
comparison for the purposes of cost and a budget allowance based on the same
level of activity (Asantewa, 2003:14).

 Zero-based budgeting: Zach (2002:19) states that zero-based budgeting is

founded on the concept that each budget starts from zero when a new budget is
prepared. Previous expenditure in this budget system is ignored.

Third stream income (not from government subsidy or school fees) may be needed to
ensure that schools can function effectively. It may happen that a school embark on
fundraising projects to ensure that the budget effectively addresses the objectives of the
school (Tassiopaolos 2005:192).

2.7 FUNDRAISING

Karlsson (2002:331) indicates that a SGB of a public school must take all reasonable
measures within its means to supplement the resources supplied by the state in order to
improve the quality of education provided by the school to all learners at the school.
According to Schreuder and Landey (2001:52), each fundraising project is a once-off
attempt to raise money for a particular purpose. Once the activity is over, no more funds
come from this source during a particular year. Various factors such as good or bad
marketing and the attitude of the community mean that it is not always possible to
predict how much money will be raised in a fundraising drive.

Anderson and Lumby (2005:52) assert that schools in many countries have traditionally
generated additional income through occasional activities in conjunction with parents,

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associations, friends of the school or community groups. Such events not only raise
funds, but also encourage parents and the local community to be involved with the
school, celebrate it and gain understanding of it and its achievements. They also
enable relationships between children, parents, staff and neighbours to develop in a
positive atmosphere. In effect, such events tend to rely on people who support them
because they wish to support the school.

Oosthuizen (2003:217) mentions that schools may employ a variety of methods to

supplement their finances. Some may include school functions, admission and
subscription fees for sporting events, and the leasing of the school facilities (tennis
courts, swimming pool and classrooms) after hours to learners and parents. Bisschoff
(2004:85) states that effective management forms an integral part of any fundraising
effort made by a school. All school fundraising programmes consist of four basic
elements:

 a firm belief in the mission of the school, as well as in the cause earmarked for
fundraising.
 effective fundraising techniques.
 effective organisation.
 effective administration.

According to Jeremiah and Palmer (2005:43), success depends on the extent to which
fundraising is viewed as part of the institution‟s overall community relations effort, the
ways in which fundraising tasks are assigned and coordinated, and the strategies used
to ensure the returns on investment in fundraising campaigns. Anderson and Lumby
(2005:44) mention that beyond the obvious reason of obtaining more funds in order to
purchase additional educational resources lies more challenging issues on the principal.

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2.7.1 Fundraising committee

The task of raising funds will be that of the fundraising committee. According to
Campher (2003:62), the members of the fundraising committee must have interest in
the school and their nominations are received from the SGB, educators and parents.
The SGB oversees the functions and the performance of the fundraising committee.

Van Deventer and Kruger (2003:240) state that the organisation of fundraising projects
is an important aspect of organising school finances. The task of fundraising can be
allocated to a fundraising committee who would then be responsible for coordinating all
the school‟s fundraising efforts. Activities need to be well organised and the procedures
for collecting money should be well planned for easy monitoring and control. The
community and other sponsors will be more willing to pledge support when they notice
good organisation, this would be an indication that funds collected will ended up
benefiting the school (FSDoBE, 2005:9).

According to Anderson and Lumby (2005:52), the following are examples of fundraising
projects that have become synonymous with schools in South Africa:

 dance evenings (sokkie jol);

 firework displays;
 sports day;
 spelling competitions;
 Mr and Miss (school‟s name) evenings with guests artists;
 staff concerts;
 learner concerts.

Certain control measures should be brought into place to ensure successful fundraising.
Schools should have strict systems of control of the money collected on behalf of the
school to:

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 ensure the public that each request is a genuine one; and
 ensure that all funds reach the school‟s fundraising committee (FSDoBE,
2005:9).

To prove that the finances of the school are managed correctly, effectively and
efficiently and to make sure that they are not mismanaged, auditing the financial records
is essential.

2.8 AUDITING

Auditing is an evaluation of a person, organization, systems, process, enterprise, project

or product by either an internal or external auditor. According to Mxuma (2006:37), it is
not enough for the governing body to draw up the financial statements. The statements
must be audited by an external auditor to make sure that they are in order. The person
appointed to check the financial records of the school must be independent and must
not be involved in any affairs or business of the school.

According to Brimley and Rulon (2008:331), an audit is a systematic process or

procedure for verifying the financial operations of a school to determine whether
property and funds have been or are being used in a legal and efficient way. The SGB
of a public school must appoint a person registered as an Accountant and Auditor in
terms of the Public Accountants and Auditors Act (Act No. 80 of 1991), to audit the
records and financial statements of a school (FSDoBE, 2005:7).

2.9 CONCLUSION

This chapter reviewed literature regarding general management, the funding received
by schools from government and the manner in which school finances should be
managed.

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Under general management, the four pillars of management were discussed as well as
some elaboration on motivation and communication as part of leading. The funding
from government essentially explained the new format of school funding in the form of
various quintiles. The aim is to provide more funding to schools situated in poor
communities.

The management of school finances was discussed as this is still a contentious issue in
many schools. Although some research in South Africa has been done on this problem,
solutions have not yet been reached and the finances of many schools seem to still be
in disarray. Decentralising school finances by the government has empowered and
given the SGB the authority to manage and administer the finances of the school. The
SGB and the parents must be involved where they can make a meaningful contribution,
for example in the finance committee and through fundraising endeavours. It is clear
that the financial statements of schools need to be audited on a yearly basis to ensure
its authenticity.

In the next chapter the research methodology employed in this study is discussed.

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 CHAPTER THREE

RESEARCH METHODOLOGY

3.1 INTRODUCTION

The preceding chapter dealt with the literature study on the financial effectiveness of
schools as well as the role of the principal and the SGB in enhancing effectiveness of
financial management in schools. The literature review revealed that there are steps to
be followed and tasks to be carried out to ensure effective financial management in
schools.

In order to establish the contribution of the principal and the SGB towards ensuring
financial management in schools, an ethnographical study was undertaken in schools in
the Lejweleputswa district, Free State province. This chapter starts with the explanation
of research and the research methodology employed in this study.

3.2 WHAT IS RESEARCH?

According to White (2003:63), research can be defined as a systematic process of

collecting and logically analysing information (data) for some purpose. Research
methodology is systematic and purposeful. Hendricks (2009:1) states that educational
research is conducted to advance our understanding of a variety of issues and can
focus on basic knowledge – such as the way the brain processes information – or on
more applied concerns geared towards determining the effectiveness of certain actions
(i.e. teaching or discipline strategies). Hendricks (2009:1) further states that in
education, research is used to develop theory, test hypotheses based on theory, study
relationships among variables, describe educational phenomena and determine
whether actions result in desired outcomes.
According to Kitchin and Tate (2000:1), research is the process of enquiry and
discovery. Research is a process through which new knowledge is discovered.

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Theories, such as a theory of motivation or development or learning for example, help
us to organise this new information into a valid body, a set of related ideas that explain
events that have occurred and predict events that may happen (Salkind, 2006:3).

Salkind (2006:3) further mentions that high quality research is characterised by many
different attributes, where many tend to be related to one another and also tend to
overlap. High quality research:

 is based on the work of others;

 can be replicated;
 is based on some logical rationale and tried to theory;
 is do-able;
 generates new questions or is cyclical in nature;
 is incremental; and
 is an apolitical activity that should be undertaken for the betterment of the
society.

Similarly, Leedy and Ormrod (2005:2) mention that research is a systematic process of
collecting, analysing and interpreting information (data) in order to increase our
understanding of the phenomenon about which we are interested or concerned. They
further mention that although research projects vary in complexity and duration,
research typically include most of the following characteristics:

 research originates with a question or problem;

 research requires clear articulation of a goal;
 research requires a specific plan for proceeding;
 research usually divides the principal problem into more manageable sub-
problems;
 research is guided by the specific research problem, questions or hypothesis;

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 research requires the collection and interpretation of data in an attempt to resolve
the problem that initiated the research.

The next section addresses the research design and methodology of the study.

3.3 RESEARCH DESIGN AND METHODOLOGY

It is important at this stage of the study to discuss the design and methodology to be
followed in this research study.

3.3.1 Research design

According to White (2003:42), research design refers to the plan and structure of the
investigation used to obtain evidence to answer research questions. The design
describes the procedures for conducting the study, including when, from whom and
under what conditions the data is to be obtained. In other words, design indicates how
the research is set up, what happens to the participants and what methods of data
collection are used.

The design followed in this study is qualitative in nature. Qualitative research is social or
behavioural science research that explores the processes that underlie human
behaviour using such exploratory techniques as interviews, surveys, case studies and
other relatively personal techniques (Salkind, 2006:201). Leedy and Ormrod (2005:133)
are of the opinion that the term qualitative research encompasses several approaches
to research that is, in some respects, quite different from one another. Yet all qualitative
approaches have two things in common. First, they focus on phenomena that occur in
natural settings that is, in the “real world” and secondly, they involve studying those
phenomena in all their complexity.

The term qualitative research can mean different things to different people. White
(2005:81) states that qualitative research is concerned with the understanding of social

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phenomena from the perspective of the participants. According to Fraenkel and Wallen
(2009:422), qualitative research investigates the quality of relationships, activities,
situations or materials. Qualitative research is both exciting and important. It is a highly
rewarding activity because it engages the researcher with things that matter, in ways
that matter. Through qualitative research, researchers can explore a wide range of
dimensions of the social world, including the texture and weave of everyday life,
understandings, experiences and imaginings of the research participants, the ways that
social processes, institutions, discourses or relationships work and the significance of
the meanings they generate (Mason, 2002:1).

Qualitative studies are more controlled, using instruments in which verbal and iconic
data are captured in the format of the instrument, such as an observation schedule,
interview or open-ended questionnaire. This type of study elicit data that are treated
qualitatively as there is not necessarily any use of statistical methods (Henning,
2004:4).

Qualitative inquiry is a research form, approach or strategy that allows for a different
view of the theme that is studied and in which the participant have a more open-ended
way of providing their views and demonstrating their actions. Thus, qualitative research
denotes the type of inquiry in which the qualities, the characteristics or the properties of
a phenomenon are examined for better understanding and explanation. Although
researchers who use qualitative methods set out with different purposes as they
conduct their studies, the general purpose in qualitative research is to understand and
interpret phenomena as they occur in natural settings (Hendricks, 2009:3).

This study uses the qualitative approach, as the views and opinions of participants are
sought in a natural setting. The researcher seeks to make meaning from the information
gathered for the purpose of simply understanding the settings and not to generalise
findings beyond it. Thus, in qualitative studies, those who are studied are normally
chosen purposively rather than randomly (Hendricks, 2009:2).

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3.3.1.1 Advantages of qualitative research

Mateev (2002:1) mentions the following advantages of qualitative research:

 In qualitative research the information received or data obtained from people is

taken as correct and believable reports of their opinions and experiences.
 It investigates, for instance, the relationships and patterns among factors or the
context in which the activity happens.
 It is concentrated on understanding the full multi-dimensional picture of the
subject of investigation.

3.3.1.2 Disadvantages of qualitative research

According to Silverman (2004:343-363), the following are disadvantages of qualitative

research:

 Researcher bias is built in and unavoidable.

 It is more difficult to determine the validity and reliability of linguistic data.
 “Data overload” – open-ended questions can sometimes create lots of data,
which can take a long time to analyse.

The researcher is aware of these disadvantages and it should be made clear that these
disadvantages does not necessarily make the data less valuable, it is just more difficult
to determine the influence of the researcher on data.

3.3.2 Research methodology

In table 3.1 below, the major types of research methods are indicated.

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Table 3.1: Major types of research methods

Quantitative Qualitative
Experiment Now Ethnographic Analytical
experimented
True Descriptive Participant Concept
Experimental Correlational Observation Analysis
Quasi- Survey Ethnographic Historical
experimental Interview Analysis
Single subject Ex post facto Document and Legal analysis
artefacts analysis

Source: McMillan and Schumacher (1997:35)

The ethnographic approach is used in this study. The rationale behind adopting this
method is that it allows the researcher to study the behaviour of people and the way
they perceive and do things. According to White (2005:104), ethnography can therefore
be regarded as a description of behaviour of people. The ethnographic approach is
characterised by obtaining data and the description of behaviour of a small number of
cases (as is discussed in 3.3.3).

In addition, Jonson and Christensen (2004:46) maintain that ethnography is one of the
most popular approaches to qualitative research in education. The word ethnography
literally means “writing about people”. Ethnography is a form of qualitative research
focused on describing the culture of a group of people. Burke and Larry (2004:46) are
of the opinion that when ethnographers conduct research, they are interested in
describing the culture of a group of people and learning what it is like to be a member of
the group from the perspective of the members of that group. They are interested in
documenting things like the shared attitude, values, norms, and practices, patterns of
interaction, perspective and language of a group of people.

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3.3.3 Population and sampling

Bauer and Gaskell (2000:361) define population as the complete collection of items or
persons who are the target of the research. Population is a statistical term that refers to
the collection of persons, groups, events or things that the research will focus on. The
population of this study include principals and chairpersons of SGBs of primary and
secondary schools in the Lejweleputswa District. The rationale for choosing these
participants is related to the SASA which states that the management of school finances
is a function of the SGB, of which the principal is a member.

Qualitative researchers view sampling processes as dynamic and suitable for specific
situations. While there are statistical rules for probability sample size, there are only
guidelines for purposeful sample size. Mason (2010:1) states that a number of issues
can affect sample size in qualitative research; however, the guiding principle should be
the concept of saturation. This has been explored in detail by a number of authors, but
is still hotly debated, and some say little understood. Charmaz (2006:114) suggests
that 25 participants are adequate for smaller research projects, while Ritchie, Lewis and
Elam (2003:84) state that qualitative samples often lie under 50. Green and Thorogood
(2009:120) state that the experience of most researchers is that in qualitative studies
little that is 'new' comes out of transcripts after you have analysed the data from 20 or
so people.

A sampling method is necessary for all research studies. This study employs the
purposive sampling method, which is discussed in the next sub-section.

3.3.3.1 Purposive Sampling

According to Cresswell (2005:596), purposive sampling is a qualitative sampling

procedure in which researchers intentionally select individuals and sites to learn and
understand the central phenomenon. White (2003:65) mentions that purposive sampling
is based entirely on the judgement of the researcher, in that a sample is composed of

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elements which contain the most characteristics or representative of attributes of the
population. Burke and Larry (2004:215) assert that in purposive sampling the
researcher specifies the characteristics of a population of interest and then tries to
locate individuals who have those characteristics.

According to Kruger and Mitchell (2006:69), purposive sampling is the most important
type of non-probability sampling. In purposive sampling researchers rely on their
experience or previous research findings to deliberately obtain units of analysis in such
a manner that the sample they obtain may be regarded as being representative of the
relevant population. Kumar (2005:179) mention that the primary consideration in
purposive sampling is the judgement of the researcher as to who can provide the best
information to achieve the objectives of the study. The researcher selects those people
who in his or her opinion are likely to have the required information and be willing to
share it.

The decision on sample size in qualitative studies was mentioned earlier. The sample
for this study comprises of 20 principals and 20 SGB chairpersons. The total sample is
therefore 40 people. Gay and Mills (2009:136) state that no hard or fast rules specify a
correct number of participants in a qualitative study. Qualitative studies can be carried
out with a single participant or with as many as 60 or 70 participants representing
multiple contexts. Gay and Mills (2009:136) further mention that qualitative studies with
more than 20 or so participants are rare and many studies will even have fewer. The
qualitative researcher‟s time, money, participants‟ availability, participants‟ interest, and
other factors will influence the number of participants to be included in the research
sample. In qualitative research, more participants do not necessarily mean that the
study or results will be more reliable or more useful. When the researcher begins to
hear the same thoughts, perspectives, and responses from most or all participants,
additional participants are not needed, at least for that particular topic or issue. Mason
(2010:2) asserts that this point is commonly known as data saturation.

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3.4 DATA COLLECTION INSTRUMENTS

The questionnaire as data collection instrument is discussed in this section.

3.4.1 Questionnaires

A questionnaire is an instrument with open- or closed-ended questions or statements to

which a participant must react. Different kinds of questionnaires can be distinguished,
such as mailed or posted questionnaires or a group questionnaire. (White, 2003: 66).

White (2003:66) further says that for many good reasons the questionnaire is the most
widely used technique for obtaining information from participants. A questionnaire is
relatively economical, has the same questions for all participants, can ensure
anonymity, and contains questions written for specific purposes. Questionnaires can
use questions or statements, but in all cases the participants are responding to
something written.

According to Kumar (2005:110), a questionnaire is a written list of questions, the

answers to which are recorded by participants. In a questionnaire the participants read
the questions, interpret what is expected and then write down the answers.

3.4.1.1 Open-ended questionnaires

According to Kumar (2005:132), an open-ended questionnaire is constructed in such a

way that the possible responses are not given. The participants write down the answers
in their own words. Open-ended questionnaires are used for seeking opinions, views,
attitudes and perceptions from participants. White (2003:68) mentions that in open-
ended questionnaires, the participants can respond with any information relevant to the
question. Open-ended questionnaires are normally used for complex questions that
cannot be answered in a few simple categories but require more detailed information
and discussion.

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Martin (2004:83) concur that open-ended questions allow the participants to supply any
appropriate answer. With an open question participants may provide different answers
to a single question. Babbie (2007:212) states that open-ended questions are
questions for which the participant is asked to provide his or her own opinions, beliefs
and viewpoints. In-depth, qualitative interviewing relies almost exclusively on open-
ended questions.

According to White (2003:68), the following are some of the advantages of open-ended
questionnaires:

 it can be used when the researcher would like to see what the participants‟ views
on certain issues are.
 they allow the participant to answer adequately, in all the details he/she likes
and to qualify and clarify his or her answer.
 they are preferable for complex issues that cannot be condensed into a few small
categories.
 they allow more opportunity for creativity or self expression by the participant.

The following are disadvantages of open-ended questionnaires that should be kept in

mind (White 2003:68):

 it may lead to the collection of worthless and irrelevant information.

 data is not standardised from person to person, making comparison or statistical
analysis difficult.
 they require good writing skills, better ability to express ones feelings verbally,
and generally a higher educational level than do closed ended questionnaires.
 open-ended questionnaires generally requires much more of the participants‟
time.
 it requires more paper and let the questionnaire look longer, possibly
discouraging the participants who do not wish to answer a lengthy questionnaire.

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Open-ended questionnaires are used in this study as it allows participants to elaborate
on their answers. In this way, in-depth data can be obtained from the purposefully
selected sample.

3.5 ANALYSIS OF DATA

Holiday (2002:99) indicates that data analysis is the process of making sense of sifting,
organising, cataloguing, selecting, determining themes and processing of data. The aim
of analysis is to understand the various constitutive elements of the data through an
inspection of the relationships between concepts or variables, and to see whether there
are patterns or trends that can be identified or isolated, or to establish themes in the
data. Babbie (2007:246) is of the opinion that responses must be coded before they can
be processed for analysis, where this coding requires the researcher to interpret the
meaning of responses.

Analysing data usually involves two steps: first, reducing to manageable proportions the
wealth of data that one has collected or has available, and second, identifying patterns
and themes in the data (Mouton, 2002:161). According to Bauer and Gaskell
(2000:355), data analysis is any approach, qualitative or quantitative, to reduce the
complexity in the data material, and to become a coherent interpretation of what is and
what is not the case. Hendricks (2009:127) mentions that the analysis of data is an
ongoing process that should occur throughout the study rather than at the end of it.
Mouton (2002:108) states that data analysis involves “breaking up” the data into
manageable themes, patterns, trends and relationships.

Henning (2007:127), Huberman and Miles (1994) and Silverman (1997:200) have
identified the following appropriate principles for most types of qualitative research
analysis:

 qualitative analysis takes place through the data collection process;

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 an analysis commences with reading all the data and then dividing the data into
smaller and more meaningful units;
 data segments or units are organised into a system that is predominantly derived
from the data, which implies that the analysis is inductive;
 the researcher use comparisons to build and refine categories, to define
conceptual similarities and to discover patterns;
 categories are flexible and may be modified during the analysis;
 the result of an analysis is a kind of a higher order synthesis in the form of a
descriptive picture, patterns or themes or emerging or substantive theory.

It is important for any qualitative researcher to follow the above principles. In this study
the researcher aimed to include all these principles during data analysis. The data in
this study has first been reduced to manageable patterns, after which certain themes
and patterns have been identified and reported on. Qualitative analysis is a method for
examining social research data without converting them to a numerical format.

3.6 MEASURES TO ENSURE TRUSTWORTHINESS

Lincoln and Guba (1985:29) propose four criteria for judging the soundness of
qualitative research and explicitly offered these as an alternative to more traditional
quantitatively-oriented criteria. They felt that their four criteria better reflect the
underlying assumptions involved in qualitative research. Their proposed criteria and the
"analogous" quantitative criteria are listed below.

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Table 3.2: Criteria for judging quantitative and qualitative research

Traditional Criteria for Judging Alternative Criteria for Judging

Quantitative Research Qualitative Research

internal validity Credibility

external validity Transferability

reliability Dependability

objectivity Confirmability

3.6.1 Credibility

According to De Vos, Strydom, Fouche and Delport (2005:346), the credibility criteria
involves establishing that the results of qualitative research are credible or believable
from the perspective of the participant in the research. Since from this perspective, the
purpose of qualitative research is to describe or understand the phenomena of interest
from the participant's eyes, the participants are the only ones who can legitimately judge
the credibility of the results. To have ensured that credibility of the study was
maintained, clear parameters for the study were set. Only participants who can provide
in-depth data regarding the phenomenon at hand were included in the study. The
researcher also presented the planned proposal at the Faculty Research Committee of
the institution.

3.6.2 Transferability

Transferability refers to the degree to which the results of qualitative research can be
generalized or transferred to other contexts or settings. From a qualitative perspective
transferability is primarily the responsibility of the one doing the generalizing. The
qualitative researcher can enhance transferability by doing a thorough job of describing
the research context and the assumptions that were central to the research. The context
of this study is mentioned in the literature study, as well as in the reporting and findings
sections. The person who wishes to "transfer" the results to a different context is then

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responsible for making the judgment of how sensible the transfer is (De Vos et al.
2005:346).

3.6.3 Dependability

The traditional quantitative view of reliability is based on the assumption of replicability

or repeatability. Cohen, Manion and Morrison (2007:434) state that essentially it is
concerned with whether the same results would be obtained if the same thing could be
observe twice. But the argument is that the same thing can actually not be measured
twice, because by definition if we are measuring twice, we are measuring two different
things. The idea of dependability, on the other hand, emphasises the need for the
researcher to account for the ever-changing context within which research occurs. The
research is responsible for describing the changes that occur in the setting and how
these changes affected the way the research approached the study. In this study, the
experiences of participants were meticulously analysed and accurately described or
interpreted.

3.6.4 Confirmability

Qualitative research tends to assume that each researcher brings a unique perspective
to the study. Cohen et.al (2007:435) state that confirmability refers to the degree to
which the results could be confirmed or corroborated by others. There are a number of
strategies for enhancing confirmability. The researcher can document the procedures
for checking and rechecking the data throughout the study. Another researcher can take
a "devil's advocate" role with respect to the results, and this process can be
documented. The researcher can actively search for and describe and negative
instances that contradict prior observations. And, after the study, one can conduct a
data audit that examines the data collection and analysis procedures and makes
judgements about the potential for bias or distortion. An audit trail was followed for this
study where participants were given the opportunity to comment on the data they
provided.

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3.7 CONCLUSION

The research design and methodology adopted in this study have been discussed in
detail in this chapter. The methods as well as processes which are followed as part of
designing this study was discussed to provide a detailed account of those processes
and methods. Qualitative research, as well as its disadvantages and advantages were
highlighted. The population of the study and the target sample were given. This chapter
outlined the research instruments chosen for this study and included the advantages
and disadvantages of questionnaires. Lastly the methods to determine trustworthiness
were elaborated on. The next chapter provides the data reporting of this study.

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 CHAPTER FOUR

DATA ANALYSIS AND REPORTING

4.1 INTRODUCTION

This chapter discusses in detail the results of the collected data. A study to obtain these
data was conducted at 20 schools in the Lejweleputswa district. The instrument used in
obtaining data was an open-ended questionnaire. Analysis of data obtained from
questionnaires was done through identifying common themes and responses. The
relevant information is broken into sentences or phrases which reflect a single or
specific thought. Two questionnaires were used to gather information (one for principals
and one for chairpersons of SGBs). The similar and different opinions identified from the
data are used to develop an overall description as seen by the participants.

4.1.1 Description of data

Section A of the questionnaire consisted of questions requiring the biographical

information of the participants, as well as their academic qualifications and level of
seniority and occupation. This data provided information on how experienced the
participants are in their current positions.

4.2 ANALYSIS AND REPORTING OF DATA

In this section the data collected from the questionnaires are reported on. The data in
this study has first been reduced to manageable patterns, after which certain themes
and patterns have been identified and reported on. Geographical data is presented in
numbers, but data obtained from open-ended questions is reported on in a narrative
way as is characteristic in qualitative reporting. The relevant information is broken into
sentences or phrases which reflect a single or specific thought. The different meanings

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identified are used to develop an overall description as seen by the participants.
Opinions, views, feelings, perceptions and attitudes of participants were captured.

Biographic information: due to the nature of the biographical data, this section is
reported on in numerical format. The reporting of data is done in accordance with the
sequence of the questions on the questionnaire.

4.2.1 Biographic information (Principals)

The following questions are asked to gather information regarding the gender, age and
experience of principals participating in this study. The qualifications of the participants
are also sought as it may have an influence on the opinions provided by them. The
principal play an important role in managing the finances (with the SGB) within the
school.

Table 4.1: Gender

Gender Frequency %
Male 18 90
Female 2 10
Total 20 100

The above outlines the biographic information of the participants with regard to the
gender of the principals. The study reflects that males formed the majority with 18 (90%)
with females constituting only 2 (10%). This information still reflects the current trend
that female principals are by far in the minority in schools.

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Table 4.2: Age

Years Frequency %
30-40 2 10
41-50 8 40
51-60 10 50
60+ 0 0
Total 20 100

Only 2 (10%) of the participants are between the ages of 30 and 40 years. 18 of the
participants are above 40 years (90%), with 10 of these between 51-60 years. This is an
indication that most principals are senior people in education. It also reflects the trend
where principals seem to stay at a particular school for long periods of time, and that
younger principals are in the minority.

Table 4.3: Experience as principal

Years Frequency %
1–5 8 40
6 – 10 1 5
11 – 15 6 30
16 – 20 3 15
21 – 30 1 5
31 – 40 1 5
Above 0 0
Total 20 100

Eight (40%) principals have between 1 to 5 years experience as a principal, which is

normally not considered as very experienced. The rest (60%) have been principals for
more than 6 years and 11 (55%) of these has experience as principal of more than 10

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years. One could thus deduce that most of the principals in this study are not novice
principals.

Table 4.4: Academic qualifications

Qualification Frequency %
Matric 0 0
Degree 3 15
BEd Hon 13 65
Masters 4 20
Doctorates 0 0
Total 20 100

The academic qualifications of the principal participants are outlined above. 13 (65%)
participants have furthered their studies and completed a BEd Honours degree. 4
(20%) principals have completed a Masters degree. Although this table shows that 3
(15%) participants have only a degree as academic qualification, one must keep in mind
that this qualification is followed by a professional teaching qualification.

Table 4.5: Professional qualifications

Qualification Frequency %
Primary Teachers‟ Diploma 5 25
Secondary Teachers‟ Diploma 8 40
Higher Diploma in Education 5 25
University Education Diploma 2 10
Total 20 100

All teachers need to be in possession of a professional teaching qualification. The

manner in which these are obtained may differ, as some enter into a professional
teacher‟s qualification from the start and others may first complete an academic type

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qualification (degree or diploma) and then cap that with a professional teaching
qualification. The principals in this study obtained their professional qualifications in the
following manner: 5 (25%) principals obtained a PTD; 8 (40%) enrolled for a STD; 5
(20%) obtained a HDE and 2 (10%) of principals obtained an UED.

Table 4.6: Qualifications in finance

Qualification Frequency %
Qualification in finance 3 15
No qualification 17 85
Total 20 100

The above outlines some form of formal qualification of participants in financial

management. Only 3 (15%) principals have obtained some form of formal qualification
in finances. The majority of principals do not have any qualification in finance. A formal
finance qualification does not necessarily mean that principals will experience no
financially related problems at their schools, but it may assist them in understanding the
fundamentals of finance.

The following questions were asked to gain data regarding the specific quintile the
school resort under and to determine the types of schools that are involved in the study.

Table 4.7: Quintiles

Quintile Frequency %
Q1 4 20
Q2 7 35
Q3 3 15
Q4 - 0
Q5 6 30
Total 20 100
The above information outlines the quintiles

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of the schools participating in the study. 14 (70%) schools in this study resort under Q1-
Q3, which are considered to be the schools in need of most financial assistance from
the DoBE. The rest of the schools (30%) are Q5 schools who receives the least funding
from the DoBE. Normally, schools in the lower quintiles (Q1-Q3) struggle with funding
by means of school fees, fundraising projects and resources.

Table 4.8: Type of school

School Frequency %
Primary 10 50
Intermediate 1 5
Secondary 6 30
Combined school 3 15
Total 20 100

Ten (50%) of the schools are primary schools (Grade R-7), 1 (5%) is an intermediate
school (Grade R–Grade 8), 6 (30%) are Secondary schools (Grade 8 – Grade 12), while
3 (15%) are combined schools (Grade R–Grade 12). The type of school may play a role
in the nature of budgetary items necessary for that specific school.

The next sub-section provides the reporting on the responses received from principals.
This section follows the qualitative pattern of narrative reporting where themes
emerging from the data are reported on.

4.2.2 Responses from principals

The following questions are reported on in the narrative as is the norm in qualitative
reporting.

Question 1

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What would you consider to be good financial management?

Most of the participants responded that good financial management is where there is
transparency, accountability responsibility and where openness serves as a norm. The
following are types of responses received from these participants:

 Where the school is abiding by all norms and standards of the Public Finance
Management Act.
 Where there are sound mechanisms and instruments in place to prevent any
possibility of fraud.
 Where all the stakeholders work strictly according to the budget and are
accountable for income and expenditure.
 Where finances are managed according to the South African Schools Act and
financial policies as set out by the DoBE
 Management of finances that intends to disclose all discrepencies and
mismanagement of funds.

From the various responses one could state that principals in general have an
understanding of what good financial management is. The major points link to
transparency and accountability where school finances are managed according to the
South African Schools Act, financial policies as set out by the DoBE and keeping to
budgets. According to the literature (cf. 2.4), it is mentioned that financial management
in education is the distribution and use of money for the purpose of providing
educational services and producing learner achievement. Although the principal is
accountable for the accuracy of the books, the managing of school finances is a primary
function of the SGB, of which the principal of the school is a member.

Question 2

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Comment on your ability to manage the financial responsibilities of your school?

Most of the participants mentioned that a finance committee (as sub-committee of the
SGB) is established at their schools and that this committee strictly adheres to the
correct execution of the budget. The auditors assist where uncertainties arise.
Measures are taken together with the SGB with resources provided by the DoBE and
parents to improve the quality of education.

Some of the participants indicated that their ability to manage the financial
responsibilities of their school is very good because of self-development of financial
skills that they have acquired through financial management training. They manage
financial responsibilities of their schools by depositing money paid at the bank daily and
by signing authorization forms that are filled before any payment can be made.

A few participants mentioned that they have the ability to manage the financial
responsibilities of their school because of their knowledge of the finance policy that they
have at their school and by aligning themselves with the principles of the PFMA.

To manage the financial responsibilities of the school effectively and efficiently, the
school must have a functional finance committee that is constituted correctly. The
finance committee must develop a very good finance policy and must adhere to that
policy. The school must have a finance committee that is transparent, open and that
involve all relevant stakeholders on whatever it does.

Question 3
Who do you think should be responsible for the training of principals in terms of
their new financial responsibilities?

Most of the participants are unanimous that it is the responsibility of the district office to
conduct training on finances for principals, but they differ on who (the people) should
conduct that training. The following people were mentioned: Section officials from the

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district office; the District financial head; Chief Financial Officer (CFO) and the Deputy
Director and officials of the procurement section of the education district.

A few participants mentioned that the DoBE must consider using independent service
providers to train principals, as some of the trainers from the DoBE have little financial
knowledge or experience and as a result provide inadequate financial training.

From the responses of the participants above it appears that principals are of the
opinion that their financial training is the responsibility of the district office, even if they
differ with regard to whom within the district office should be tasked with that. That
financial training is essential for principals is agreed upon when scrutinizing the
responses; the differences came in when the responsible people to deliver that training
is chosen.

Question 4
According to you, what should be covered in the training of financial school
management for principals?

Participants mentioned different items that should be covered in the training of financial
school management for principals. As a wide variety of items were mentioned, they are
listed underneath:

 budgeting, authorization of cheques, reconciliation and drafting of financial

statements.
 the manner in which bank statements should be analysed, training in the financial
programme available (SA Sams) and training regarding the various
responsibilities of the finance committee.
 proper control of registers and records, basic accounting principles, management
and monitoring skills, reporting and fundraising.
 spending and relevant Acts must be covered, for instance:
 legal requirements pertaining to finances.

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  the South African Schools Act (Act 84 of 1996).
 the Labour Relations Act (Act 66 of 1995).

The above list covers a variety of needs brought forward by principals. All these
principals mentioned in Question 2 that they have the ability to manage the finances at
their school. The above responses indicate that there are certain areas of school
financial management that they would like to be included in a training programme, such
as budgeting, drafting and reconciliation of financial statements, as well as the finance
committee and the responsibilities of its members. The participants also felt that proper
control and records of all relevant financial documents, fundraising and reporting should
also be covered. It almost seems as if all areas of financial management was
mentioned, which gives rise to the question of whether all these principals really
experience no problems with school finances.

Question 5
What would you want to gain from a training programme?

Most of the participants indicated that they want to gain knowledge regarding the
principles of budgeting and budgeting systems. Various other preferences were also
mentioned, which are listed underneath:

 to gain knowledge of basic financial management - including terminologies used,

such as debtors, liabilities, trial balance and cash flow statements.
 to have knowledge of utilising finances effectively as well as to gain more
knowledge regarding fundraising efforts.
 to be able to translate strategic objectives into action plans – and to link these
with funding, to have the skills to delegate responsibly without neglecting
important responsibilities and to have knowledge of the PFMA.
 to properly review the budget monthly with regard to income and expenditure in
order to improve the financial system in use at their schools and to gain the
ability to manage all funds of the school on a daily/monthly/yearly basis.

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  to gain the capacity to keep pace with financial demands when the financial
resources of the school is limited.

Participants have provided a number of issues. Principals seem to have a general

knowledge of financial management (Question 2), but seem to lack more specific
financial skills to ensure ultimate financial management of their schools.

Question 6
Who is ultimately responsible for the drawing up of the school budget and what is
your role function in drawing up the budget?

Most of the participants stated that the SGB is ultimately responsible for drawing up the
school budget and that their role as principals is to provide guidance and advice to the
SGB. It is the responsibility of the public and all stakeholders (e.g. principals, elected
members of the SGB, co-opted members of the SGB, parents, educators, non
educators and learners) to draw the school budget and their responsibility as principals
is to reconcile it.

Some of the participants said that it is the responsibility of the finance committee to
draw up the school budget. Legally it is the responsibility of the SGB to draw up the
school budget, but due to the level of literacy of the parents‟ component of the SGB,
budgeting is being done by the principals and the educators.

A few participants said that the school budget must be drawn up by the staff members,
the school management team (SMT) and the finance committee. The role of the
principal is to assist with the needs to be catered for by the budget and to ensure that
the budget is drawn up according to the policy (SASA and PFMA).

From the responses it is clear that most participants have similar views on who should
draw up the budget of the school. Although some mentioned that is it the duty of the
finance committee, this committee still reports to the full SGB. According to the

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literature (cf. 2.6), a budget can be regarded as a management tool or mechanism by
which the management team and SGB of the school can estimate and plan, as well as
utilise, coordinate, monitor and evaluate the allocated resources of the school in
financial terms. Financial management is a sensitive issue and it is thus important that
the SGB remember the following values: openness and transparency; responsibility and
accountability.

Question 7
Legally it is the function of the SGB to manage the school budget. What role does
the SGB play in this regard at your school?

Most of the participants stated that the finance committee, as a sub-committee of the
SGB, must meet quarterly to check whether the expenditure incurred and income
received was according to the budget. The SGB draw up, approve, manage and
implement the budget and review it every six months. The SGB also approves the
purchases made by the school. The SGB drafts the budget from the information they
obtained from different stakeholders and table it during the annual general parents‟
meeting for approval.

A few participants stated that each year the principal together with the finance
committee must appoint a person who should manage the approved budget portfolios,
i.e. stationary, sports, cultural activities, hostels and workshops.

A few stand-alone responses were also received and they are listed here:

 The SGB monitors the application of the budget, verify the correctness of all
payments and negotiate with relevant service providers on standard of service
that has to be observed.
 The SGB controls the use of funds, compares quotations with purchases,
scrutinise the requisitions and also updates parents regarding finances.

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  It is the responsibility of the finance committee to control financial records and
the executive committee of the SGB sees to the day-to-day duties of the SGB in
this regard.

The participants understand that legally it is the function of the SGB to manage finances
and to draw up the school budget. One could assume that, although they have given
different responses, they understand the procedure for drafting the school budget and
handling of funds received and spent.

Question 8
Comment on the procedure of budgeting at your school?

Most of the participants mentioned that inputs and needs are collected from all
stakeholders, such as HODs, teachers, learners and parents and through the finance
committee. The budget is compiled and presented to the SGB after which the majority
of parents present at the annual parents‟ meeting should approve it. Recommendations
made regarding the needs that are consolidated, reports are given to all the
stakeholders.

A few participants mentioned that each time when an item is to be bought, the budget is
consulted for the centre code and is translated into the school budget to correlate with
the departmental budget.

From the responses it seems as if all stakeholders are involved, consulted and their
recommendations are taken into consideration when the school budget is drawn up and
approved by parents at the general meeting. The budget will not be finalized unless the
majority of parents present and voting at a meeting. A budget must be presented to the
general meeting of parents convened on at least 30 days notice, for consideration and
approval by a majority of parents present and voting.
Question 9
How do you monitor the budget at your school? Explain

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Most of the participants indicated that the finance committee meets at the end of each
month to draw the income and expenditure statement for the previous month and to
compile a cash flow budget for the next month and compare income and expenditure
against the budget. They discuss the financial reports from time to time and check the
allocation made and the demands that need serious attention. The budget manager
receives a copy of the budget as allocated to him/her on which accurate records must
be kept of each and every amount spent with regard to the respective allocated budget.

Some of the participants mentioned that the budget is monitored monthly and when
resources are to be purchased the budget is consulted regularly. The expenses are paid
electronically or by cheque. The cheque is signed by the principal and two members of
the SGB. They monitor that expenditure in each item does not exceed the budgeted
amount to avoid overspending. Overspending can be curbed if all payments are
authorized according to policy.

A few of the participants stated that the financial programme that they use is Pastel and
it assists them to check the availability of money in a specific sub-budget before any
payment can be made. Quotations are requested for all items budgeted for and
payments are made for goods delivered. The budget is also monitored by the principal
together with the finance committee.

One of the participants mentioned that the finance committee discusses projections,
variations and monthly financial reports and quarterly reports are provided culminating
in the annual audited financial statements.

From the responses above the school needs to monitor its finances continuously.
Monitoring the school budget entails keeping a check on the difference between the
planned financial status of the school at any given time and the actual financial status at
the time.

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Question 10
Comment on your success to keep to the budget? You may mention any
budgeted items that cause problems in this regard.

Most of the participants stated that they are generally successful in keeping to the
budget. They have measures in place to keep to the budget and that they also adhere
to the financial policy of the school, but non-payers make it difficult to generate the
income that is budgeted for. Any item which has not been budgeted for, is not
purchased. They use a template, which shows the amount paid for the item and the
amount of money that was budgeted for those items.

Some of the participants mentioned that different budgeted items hamper their
successful adherence to the budget. The problematic budgeted items mentioned are:
repairs and maintenance of buildings and grounds, touring, unbudgeted workshops,
transport, and telephone.

A few participants said that as quintile 3 schools they experience a lack of finances.
They find keeping to the budget a very challenging process and made a plea that the
department must assist them in this regard. .

Principals responded that they keep to the budget as a general principle. From personal
experience, the researcher knows that some schools work on a „bottom-line‟ budget,
where money is juggled around amongst the budgeted items, as long as the total
budgeted funds on the budget is not exceeded.

Question 11
Does a finance committee exist (is it properly constituted) and what is your role in
the finance committee?

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Most of the participants indicated that the finance committee is established and that
their role in the committee is to train, control, and advice the SGB in managing the
finances of the school. They provide records in the form of reports. In many cases the
principal chairs the finance committee meetings and provide leadership and guidance to
the finance committee. The role of the finance committee is to exercise control over all
expenditure and purchases, as well as the asset register. These participants stated that
the finance committee is constituted correctly and compose of parents, educators and
the finance clerk.

A few participants mentioned that they as principals must make the decisions, as
members of the finance committee sometimes do not attend the meetings. They then
call the chairperson of the finance committee or the SGB chairperson to sign
documents.

The composition of the finance committee may consist of the treasurer, principal,
educators, parents (not necessarily from the SGB) and non-teaching staff. It is
advisable that at least eight members make up this committee, with a SGB member as
chairperson. It is a worrying factor that in some instances such meetings do not occur
and that the principal is left with the decision making powers.

It is clear from the above that the finance committee exists at schools and is constituted
correctly. The chairperson of the finance committee is appointed by the SGB in writing.
The finance committee must draw the financial policy and must adhere to it to ensure
accountability, openness and transparency. In some cases it seems as if the principal
makes the decisions of the finance committee and merely get the signature of the
chairperson as a rubber stamp.

Question 12
What measures do you have in place to ensure that transparency, accountability
and responsibility, in terms of your schools finances, are adhered to?

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Most of the participants stated that reports on receipt books, deposit books, analysis
books and chequebooks must be made quarterly to the SGB. The schools have
external auditors who check the school financial records annually. The correct
accounting procedure is adhered to. These procedures contribute to transparency and
accountability.

A few participants indicated that records are kept and there is constant reporting to all
stakeholders i.e. parents and educators. All stakeholders‟ involvement contributes to
transparency and accountability.

Other participants provided similar opinions, but added more information:

 All requisitions are in writing and support materials are provided when needed.
Invitations of quotations, receipts and invoices should serve as proof of
purchases and they must be reviewed by the SGB. No blank cheques should be
handled and cheques must be authorized by the chairperson and the treasurer.
 Control measures for income, expenditure and petty cash are in place.
 Even though finance committee meetings sometimes do not occur, all other
procedures are followed by the principal.

The important characteristic of the present approach to education management in

general and financial management specifically, is the emphasis on transparency and
information sharing among all stakeholders. For the school principal and the SGB this
means that they must deal with funds in a responsible manner and that they are
accountable to the parents, the learners, the community and the DoBE.

Question 13
Are you able to delegate any of your financial role functions to your senior
management team, if so, what functions are you able to delegate?

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Most of the participants stated that they do not delegate financial role functions, as
financial issues are the responsibility of the principal. Their role is to exercise control
over all expenditure and purchases and asset register. These participants said that they
could not delegate because the school has a finance committee and this committee
must work closely with the principal. Arrangements are made if they are absent and
when there are urgent matters that need attention.

Some of the participants stated that they sometimes delegate certain financial aspects
to their senior management, but they differed on the aspects that are delegated to the
senior management team of the school:

 the deputy principal is responsible for signing cheques in an event where the
principal is absent.
 the deputy principal compiles the budget and controls all expenditure to ensure
adherence to the budget. A comment such as this may be problematic as
principals who delegate most of their financial authority may run into serious
problems at some stage.
 the senior management team (SMT) are delegated powers by the principal to
facilitate mini-budgets from sub-committees or different departments.
 the SMT is delegated powers by the principal to authorize payments of SGB
employees.
 SMT members are delegated by the principal to do verification and
recommendations of school funds to facilitate financial management of NSNP
(National School Nutrition Programme) and, excursions, as well as ordering The
participant did not mention more detail
 the SMT are also delegated to control receipts and bank deposits, compare them
with bank statements and control receipts and expenditure in petty cash. In most
cases this is done by the bookkeeper

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Delegation is a sub-management function. The principal must make the decision as to
what type of functions can be delegated. It is important to keep in mind that
responsibility can never be delegated. Although duties may be delegated principals will
still be accountable for the school budget The principals must make sure that they
check whether the accounting practices is adhered to even if they have delegated some
of their financial responsibilities.

Question 14
Who oversees the financial records of the school?

Most of the participants agreed that they, as principals and accounting officers, together
with the finance committee (as part of the SGB) oversee the financial records of the
school.

Other participants agreed with the above, but added other parties as well. These other
parties include the financial clerk, a cashier, finance committee, the School
Management and Governance Developer (SMGD) and independent auditors.

According to the literature study (cf. 2.4.1), it is indicated that in terms of financial
matters, the principal should have various school accounts and records kept properly
and should make the best use of funds for the benefits of learners in consultation with
the appropriate structures. It seems as if principals know who should oversee financial
records of the school. It should be mentioned here that increasing the number of people
involved with financial records, may open up more opportunities for mismanagement of
funds.

Question 15
In your opinion, what are some of the problems or obstacles that you
encountered in fulfilling your financial management role?

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Many participants indicated that the SGB is ill informed about the extent to which they
are involved in the day to day running of the school, including the finances. The SGBs
often have a lack of fundraising strategies to supplement the departmental allocation in
order to improve the quality of education that is provided by the school. Poor financial
procedures and control is one of the obstacles that they have encountered in fulfilling
their financial control role. The lack of financial support by the parent community and the
department is another problem they encountered.

A few of the participants mentioned that they requested training on financial

management issues from the district office in writing, but that their request was turned
down (the reason for this was not provided by the participants).

Collated comments of participants are mentioned here:

 a lack of knowledge of financial management skills by most members of the

SGB, especially the parents component who sometimes want to deviate from the
budget without thinking of the control measures that are in place.
 delays with money (funding) receivable from the Department. Budgeted items
cannot be dealt with prior to the receipt of funding. Schools then struggle to
execute plans as per their budgets.
 the non-availability of proof of payments.

From the responses above it is clear that most of the participants did not encounter any
problems regarding the execution of their financial role. Lack of fundraising strategies,
poor financial procedures by the SGB is a problem. Lack of financial support by the
community is also a problem. It is also clear that some of participants encountered
problems with regard to their financial management role.
Question 16
What level of cooperation do you receive from your SGB regarding financial
matters of your school?

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Most of the participants indicated that they receive cooperation from the SGB. The SGB
is always supportive, as functional as possible and someone from the SGB is always
available to discuss problems in case of an emergency. Some of these participants said
that not all the members of the SGBs at their schools are knowledgeable about the
finances. These SGB members do not understand the financial records and can make
no contribution when these records are checked and discussed each quarter. They rely
on what the principal or other SGB members tell them.

Some of the participants indicated that the support they receive from the SGB is
satisfactory and concurred with the above group in mentioning the lack of financial
knowledge many SGB members have.

Another issue raised by most of the participants is the struggle for the SGBs to raise
funds for the school. The community surrounding their schools is not financially strong,
and as a result the school cannot raise much more funds through this avenue.

Other issues raised by participants were:

 The SGB members help them to keep to the original financial planning, and
although they sometimes differ in opinion, they reach an agreement in the end.
 The SGB wants to dictate the decisions taken, but they are not always fully
conversant with what is expected of them. SGB members should know what their
role is and what the role of the principal is.

The level of cooperation that principals receive from their respective SGBs differs from
school to school. It is good to see that in some schools the principals and SGBs work
together to the benefit of the school. In some cases principals perceive the cooperation
from the SGB as below standard.

Question 17

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What level of continual support (if any) do you receive from the District Office
with regard to financial management?

Most of the participants indicated that they receive continual support from the district
office regarding financial management. They stated that the district office organizes
workshops that assist them in the financial decisions they need to take or discuss with
the SGB. The SMGDs are their first link with the District office and seem to be the
person they gain most knowledge from. The District office also provides workshops for
the treasurer and the chairperson of the SGB.

Some of the participants stated that they do not receive any continual support from the
District office with regard to financial management. They only receive the grant payable
every month to their school.

It is clear from the responses above that participants mostly receive continual support
from the district office from different stakeholders with regard to financial management,
although it seems that this support is not sufficient as some still lack the necessary
financial knowledge. Information provided also indicates that the District office
sometimes seems unwilling to support individual principals that need assistance. It is
unsure why the SMGD allocated to the school does not assist in such a case.

Question 18
What impact did decentralization of funds to schools have on you as financial
manager of the school?

Some of the participants indicated that the decentralization of funds to school level has
had a positive impact on the management of finances of the schools. Participants made
comments that it has improved their purchasing power and efficiency and as a result
proper and timeous delivery of books and stationary has occurred. Decentralization
encourages stakeholder participation, as decisions regarding finances need to be made
by the SGB. Some of these participants indicated that it has a positive impact on them

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as the financial manger of the school, because they are now able to purchase resources
for themselves unlike before where it was done by the Department. That in itself
enables them to manage the funds accordingly and it also enables them to grow in
terms of their financial knowledge. The schools obtain goods ordered in time and under-
spending is limited. Schools are now able to buy the things they need and do not have
to make space for unnecessary equipment bought by the District for the schools like it
was done before.

Some participants stated that decentralization of funds has just increased their workload
and they see this as a burden. Suddenly they have to spend a lot of time on planning
what to do with their funds. The paperwork has increased a lot and they indicated that
this distracts them from their normal management tasks at the school. Some of these
participants mentioned that they have more arguments amongst staff, as everyone
wants some of the money for their subjects or programmes.

A few participants indicated that decentralization did not have any impact on them, as
their school is a Section 20 school where the Department manages most of the funds of
the school.

Most responses of the participants above indicate that decentralization has a positive
impact on them. Decentralization encourages stakeholder participation regarding
financial decisions that must be made by the SGB. Principals have now become more
accountable about financial decisions that must be made. In some instances the
principals feel that decentralization has increased their workload, without necessarily
alleviating their financial problems.

Question 19
Are there any other comments you would like to share regarding the financial
management of the school?

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The participants provided various responses that are listed here:

 Some mentioned that their success regarding the financial management in the
school is getting better. They still have much to learn, but as time goes on they
will become more confident with managing the finances at their schools.
 The finance committee and SGB approve items in advance and. according to the
auditors report, everything is in order and as a result their school financial
management is very good.
 They are able to account on actual purchases made rather than complaining
about outstanding orders because of their correct financial practices and
procedures.
 The day-to-day payment or administration is well done as methods of payment
are being strictly followed and adhered to. All principles of financial administration
and better record keeping is also maintained.
 There is an improvement on recording and timeous finance reporting to
stakeholders, and training on finances must be arranged by the school itself.
 One of the participants mentioned that they attributed their success to the
financial clerk of their school because of hard work and as a result other schools
are copying from them.

The responses from principals indicated that although steps in the right direction are
made in terms of sound financial management at schools, certain areas still need
attention. For schools to really function effectively, SGBs should be in a position to
assist the principal in all financial endeavours.

In the next section the questionnaire responses from SGB chairpersons are reported
on.
4.2.3 Biographic information (SGB chairperson)

Table 4.9: Gender

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 Gender Frequency %
Male 15 75
Female 5 25
Total 20 100

15 (75%) of SGB chairpersons are males and 5 (25%) of the SGB chairpersons are
females. It is not clear why more males are elected to this position. It is perceived in
some cultures that the leader should be a male. This may have an effect on the given
numbers.

Table 4.10: Age

Years Frequency %
30-40 3 15
41-50 12 60
51-60 4 20
60+ 1 5
Total 20 100

Three (15%) of SGB chairpersons are aged between 30 and 40 years. 12 (60%) of
SGB chairpersons are between 41 and 50 years. Only one (5%) SGB chairperson is
older than 60 years. The majority of the SGB chairmerns are between 41 and 50 years
old. The SGBs in this study are chaired by reasonably senior people.

Table 4.11: Experience as member of SGB

Years Frequency %

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 1–5 9 45
6 – 10 5 25
11 – 15 3 15
16 – 20 3 15
Total 20 100

9 (45%) of SGB chairpersons have between 1 to 5 years experience, and five (25%)
SGB chairpersons have 6 to 10 years experience. Three (15%) of the SGB
chairpersons have 11 to 15 years experience and 3 more (15%) have 16 to 20 years
experience. Most of the chairpersons seem to have experience as SGB members. It
would probably be to the benefit of a SGB chairperson to have some experience prior to
election as chairperson. This may provide more confidence once elected as
chairperson.

Table 4.12: Quintile

Quintile Frequency %
Q1 8 40
Q2 4 20
Q3 5 25
Q4 - 0
Q5 3 15
Total 20 100

8 (40%) of the schools in this study are quintile 1 schools, while 4 (20%) are quintile 2
schools. Five (25%) schools are quintile 3 schools, with 3 (15%) schools being quintile 5
schools. Quintile 1-3 schools receive most (if not all) of their funding through allocated
grants from the Department. The funds of Quintile 5 schools are generated through
school funds, projects and a small grant from the Department.

Table 4.13: Type of school

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 School Frequency %
Primary 10 50
Intermediate 1 5
Secondary 6 30
Combined school 3 15
Total 20 100

10 (50%) of the schools are primary schools and 1 (5%) an intermediate school. 6
(30%) of the schools are secondary schools, while only 3 (15%) are combined schools.
These figures are important as it may play a role in the type of budget that should be
drafted by the school. Primary schools may have different financial needs and/or
expenditure than secondary schools for instance.

Table 4.14: Academic qualifications

Qualification Frequency %
Not Matric 6 30
Matric 10 50
University 2 10
Other 2 10
Total 20 100

10 (50%) of the SGB chairpersons have only a matric qualification, while 6 (30%) of the
SGB chairpersons did not complete secondary school. Only 2 (10%) have a university
qualification with another 2 (10%) other qualifications. It is interesting to note that such a
high number of chairpersons either did not complete their secondary schooling or only
completed it. Academic qualifications do not necessarily make for a better chairperson,
but it may play a role in the way they are perceived by other qualified members of the
SGB or even the principal and teachers on the SGB.

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Table 4.15: Experience as Chairperson of SGB

Years Frequency %
1-5 14 70
6-10 4 20
11-15 2 10
16-20 0 0
Total 20 100

14 (70%) of SGB chairpersons have 1–5 years experience as Chairperson, while 4

(20%) has between 6 to 10 years experience. Only 2 (10%) have more than 11–15
years experience as SGB Chairperson. Most chairpersons have been elected for less
than two terms – which is two terms of three years. One can suppose that experience
as a chairperson is a positive aspect, which in many cases it could be. Care should
however also be given to the fact that complacency can creep in and that growth be
hampered at a school if the same person chairs the SGB for too long.

The second part of the reporting deals with written responses received from
questionnaires completed by SGB chairpersons. A few of the questions are the same as
were asked to principals in order to determine the perceptions of both parties to similar
questions. These are commented on when they are discussed.

4.2.4 Responses from the SGB chairpersons

Question 1
What would you consider to be good financial management?

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Various responses were received and are listed:

 knowledge of financial matters, good record keeping and proper control of the
budget
 fruitful expenditure and transparency where financial records are audited and all
stakeholders provided with financial reports.
 where all expenditure and income is supported by valid documents.
 where the school and the SGB manage finances in adherence to the SASA, the
Public Finance Management Act and comply with financial regulations.
 when the financial policies of the Department and guidelines of the South African
Auditors Association are adhered to.
 where a proper and informed budget is drafted and kept to during the financial
year.

The participants know what good financial management entails. They state relevant
aspects, but the real proof is in the execution of all the things mentioned here.

Question 2
Who is responsible for the finances of your school?

Various answers were given by the participants and some of the answers overlap.

 The financial clerk of the school, the SGB and the principal are responsible for
the finances of their school.
 The SGB, the finance committee the deputy principal, the book-keeper and all
other stakeholders including the principal as the accounting officer are
responsible for the finances of the school.
 The finance committee, finance clerk, principal, the SGB chairperson and
treasurer are responsible for the finances of the school.
 The SGB of Section 21 schools are responsible for the finances of the school.

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  The SGB, finance committee, treasurer, finance officer, the principal and other
members appointed by the SGB are responsible for the finances of the school.
 In addition to this participants also mentioned that the book-keeper, the treasurer
and the financial clerk are responsible for the finances of their school.

The participants mentioned all the people who may have a role to play in school
finances, but the SGB (with the principal as member) is responsible for the financial
management at the school.

Question 3
Briefly describe the role that the principal, treasurer or other members play in the
management of schools funds?

Various responses were given by the participants and some of their responses overlap.
Here is a list of their responses.

 The principal, the treasurer, the finance committee and the SGB plays a very
important role in the management of school finances.
 The role of the principal in the management of school funds is to monitor
adherence to finance policy and the school budget.
 The principal as the accounting officer plays a very important role in managing
the finances of the school by authorizing payments and other members of the
SGB approves it.
 The principal, the treasurer and other members of the SGB play a very important
role in the management of school funds by ensuring proper handling of funds,
keep the correct records of how funds have been used and draw up records of
income and expenditure.
 The role of the principal, the treasurer and other relevant stakeholders in financial
management is to compile monthly financial reports, to draw the budget and to
help with the implementation of the budget.

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  The principal, the treasurer and other members of the SGB play a very important
role in management of school funds by checking the requisition that has been
made.
 The principal as ex–officio member plays a very important role in managing
school funds by liaising with the treasurer to execute the expenditure as agreed
upon by finance commiittee which is the sub-commiittee of the SGB.
 In addition to that the participants mentioned that the SGB plays a very important
role in managing school funds by appointing a finance commiittee that will be
responsible for proper control of finances, to saveguard all financial related
documents against loss, theft or fire and to advice the SGB on finance related
matters and to keep minutes of the finance committee.
 In addition to that the participants also mentioned that the principal as a
professional manager becomes part of the financial committee and in that way
plays a very important role in the management of school funds.
 The principal, treasurer and other members of the SGB sign cheques and give
financial reports to all relevant stakeholders.
 The principal, the treasurer and other members of the SGB prevent the misuse of
funds and prepare annual financial statements for presentation to all
stakeholders, which is a positive sign of good financial management.
 The role of the treasurer is to receive all money that is paid to the school, the
principal control income and expenditure and other members of the SGB discuss
and approve financial reports and draw the budget that is approved by the
parents and that is in itself good financial practices..

It is clear from the responses of the participants above that the principal, the treasurer
and the chairperson of the SGB plays a very important role in the finances of the school.
Question 4
What is your opinion regarding funding received from the department for your
school?

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Most of the participants indicated that the amount of money that they receive from the
department is not enough as they are Section 20 schools and a no-fee paying school. In
addition to that the participants added that the fund they receive from the department is
inadequate. In addition to that the participants also added that the funds they receive is
not enough, because the Department allocate funds according to the number of
learners in the school and do not consider learners who are exempted from paying
schools fees. They also mentioned that they sometimes receive the funding late, which
hampers their execution of financial planning. They stated that the funding grants must
be increased as it is essential that the learners from poor family backgrounds be
assisted more.

Some participants added that their budget income can be increased if those parents
who are able to pay school fees are allowed to do so in the no-fee schools. Some of
these participants also added that the funds they receive from the department helps a
lot as the school is able to execute its financial obligations, but that it is not enough

It is clear from the responses from the participants above that the funds they receive
from the department are not enough. Funding that is received from the department must
be enough and in time to buy educational resources like, textbooks, stationary,
photocopy paper and equipment for learners.

Question 5
What do you think are the financial functions of the SGB?

Most of the participants mentioned that the financial function of the SGB is to draw up
the budget and make sure that money is used for what it has been budgeted for. The
SGB must make sure that the expenditure is in line with the budget that has been
agreed upon. The financial function of the SGB is to present the budget to the parents
for approval and to give the financial report to them on a quarterly basis. The financial
function of the SGBs is to set up and administer school funds, to appoint the finance
committee, keep minutes of all SGB meetings, implement financial policies and

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procedures and prevent misuse of funds. It was also added by some of these
participants that the SGB should support all activities of the school to the benefit of the
learners and to make agreements with companies.

A few of the participants added that the financial function of the SGB is to collect funds
and use that profitably. The financial function of the SGB is to control, plan and manage
money that has been allocated by the department to the school. The function of the
SGB is to raise funds to supplement resources from the department, to manage school
funds and to prepare annual financial statements.

In addition to that some participants said that the SGB raise funds to supplement the
resources that are supplied by the state in order to improve the quality of education
provided by the school to all learners.

From the responses it is apparent that financial management is the prerogative of the
SGB. This is a positive feedback. This indicates that SGBs are now becoming aware of
some of their roles and they understand them.

Question 6
Who do you think should be responsible for the training of SGBs in terms of their
financial responsibilities?

Most of the participants indicated that the department of education is responsible for the
training of the SGB, but they differ on who must conduct that training. A few participants
mentioned that experts in financial management from outside the department could also
be roped in. In addition to that some participants indicated that the school itself is
responsible for the training of the SGB in financial matters. Accounting teachers could
be asked to assist in this regard.

The following are officials of the Department of Education and experts whom they think
must conduct the training of the SGB:

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  the SMGD together with the principal;
 the financial experts within the department;
 the finance section officials of the district, especially the deputy director of
finance.

According to the SASA, the Head of the provincial education department should
establish a programme that provides training for newly elected SGB members.
Provincial funds are appropriated for this action. The people tasked with this training
should be well versed in financial matters for such training to be effective.

Question 7
When should financial management workshops for SGB members be presented
and who should present it?

Most of the participants mentioned that training of SGBs must be conducted as early as
possible after the election and must be presented by departmental officials who are
responsible for finances. Some responded that training must be conducted between the
time of the election and the time when budgets should be submitted.

A few participants stated that it must be conducted after working hours and more than
once a year. Weekends were mentioned as possible times as most of the SGB
members work during the week. Some of these participants stated that SGB workshops
must be presented by the principals together with the SMGDs.

It is clear that financial management workshops of SGBs must be conducted

immediately after the SGB have been elected and that follow-up workshops are needed
after that. It seems essential that training be done prior to the annual budget be drafted.
Mention was made that these workshops should be considered for weekends to ensure
that most SGB members are able to attend. When policy changes come into effect,
SGBs should be informed and trained again on new policies.

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Question 8
According to you, what should be covered in the training of financial school
management for SGBs?

The participants differ on what should be covered in the training of financial school
management for SGBs and here is a list of their responses:

 budgeting;
 the finance policy, sound financial management practices and procurement;
 planning and spending;
 Public Financial Management Act, the South African Schools Act and
fundraising;
 recordkeeping of financial documents;
 procedures for managing school finances, budget management, purchases and
asset register;
 monitoring and control of school funds; and
 the role of the SGB in developing and executing a finance policy.

Responses show that participants want many aspects to be covered in financial

management training. It seems as if SGB members are less knowledgable than what
they want to admit and that most of them need training in some of the fields of financial
management. Almost all aspects of financial management at schools were mentioned.

Question 9
What would you want to gain from such a training programme?

Most of the participants indicated that they want to gain knowledge of how finances
should be managed. The participants want to gain knowledge on how to handle
financial statements and sound generally accepted financial practices. The participants

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want to understand the SASA in terms of finances. Some of these participants also
indicated that they want to gain knowledge of how to audit the finances of the school
internally prior to sending it to the external auditors. It was also indicated that they want
to know how to interpret reports that are written by external auditors.

Some of the participants were more specific and stated that they want to gain
knowledge of how to use the analysis book, how to draw the budget and how to know
how much funds should be allocated to different items on the budget. In addition to that
a few participants added that they want to know how to work with journals, cash flow
statements and reconciliations. This will allow them to understand the flow of money
through the school.

One can deduce that participants have a need to gain knowledge on various issues
during training. Important aspects were mentioned and if SGBs are to function
efficiently, they need to gain the knowledge mentioned through proper training
programmes.

Question 10
Comment on the use of English only in current training material for SGBs?

Most of the participants indicated that the use of English only in current training
materials for SGBs is not fair. They added that training should also be done in the
mother tongue of the SGB members. If a school has a bilingual policy, then training
should be provided in both languages. They also added that the training material should
be written in the language that all the participants will understand. The rationale
provided is that they have difficulty with financial terminologies as it is, but that mother
tongue material may assist them in grasping some of the concepts easier.

Some participants added that the level of education of SGB members must be taken
into consideration when the training manual for SGBs is compiled. Not all SGB

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members have a high level of academic training and training material should link to the
level of the SGB members.

A few participants added that some members of the SGB resign because of the use of
English in their training. A few other participants indicated that most of the members of
the SGBs do not understand English and they depend on the principal for explanations.
The participants added that as a result of that corrupt principals take advantage of that
and abuse school funds.

From the responses the researcher derives that the use of English only in the current
training material of SGBs disadvantages some of them. The participants felt that other
languages must be used as many of the SGB members are not conversant enough in
English to understand financial concepts. It was brought to the fore that the SGB
training material should be written in the language that they all understand.

Question 11
Legally it is the function of the SGB to manage the school budget. What role(s)
does the SGBs play in this regard at your school?

Most of the participants indicated that the role of the SGB is to draft the budget and
present it to other stakeholders for comments, questions, contributions and approval
during the general parents meeting. The role of the SGB is to control expenditure and
income as well as the budget. The role of the SGB of a public school is to prepare a
budget each year according to guidelines determined by the member of the executive
council which shows the estimated income and expenditure of the school for the
following year. The SGB is to draw up the budget based on the needs that are identified
by the educators and the principal.

Some of the participants stated that the role of the SGB at their school is to see to it that
the school stays within the budget. The SGB is to check from time to time whether the

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school does not exceed the budget during the year. They must monitor, mandate and
approve payments and purchases according to the budget.

A few participants said that the role of the SGB is to legally govern the school in
partnership with all stakeholders. The role of the SGB is to establish committees, to buy
books and minor items and also to monitor and control funds. It was also mentioned that
in some cases the principal and staff draft the budget and then present it to the SGB.
This in itself is not necessarily incorrect, but SGBs should be able to spend time on a
drafted budget to familiarize themselves with its contents prior to signing it off.

It is evident from the responses above that the drafting and controlling of the budget is
an important role of the SGB. It is also clear that legally it is the responsibility of the
SGB to draw up the school budget, but in most cases due to a lack of financial
information it is done by the principal and the staff and then presented to the SGB.

Question 12
Does a finance committee exist (is it properly constituted) and what is the role of
the SGB in the finance committee?

All of the participants indicated that a finance committee exists and that it is properly
constituted at their school. In most cases, the finance committee is constituted of the
principal, SGB chairperson (or vice-chairperson), an educator member and the
treasurer. These participants indicated that the role of the SGB is to keep overall
control of the school funds through the finance committee and for this committee to
provide quarterly reports to SGB meetings.

It appears from the responses of the participants above that the schools have a fully
functional finance committee that is correctly constituted and appointed by the SGBs.
According to the literature (cf. 2.4.4), it is mentioned that it is possible and highly
recommended that a finance committee should be formed to assist the SGB in handling
the financial matters of the school.

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Question 13
Comment on the necessity of the fundraising committee at your school?

Most of the participants agreed that a fundraising committee is necessary, as it raises

additional funds that can be used to meet some of the financial needs of the school.
Some of these participants said that the fundraising committee is necessary because it
raises funds for items that are not budgeted for. The fundraising committee should ask
the parent community to assist in raising funds. Many of these participants also
mentioned that raising funds in their community is a difficult task as parents do not have
any reserve funds to provide to the school.

Another participant mentioned that there is no fundraising committee in their school and
that they have different committees in the school that aim to raise funds for the school.

It is clear from the responses of the participants that the fundraising committees have
the responsibility of taking measures to supplement resources provided by the state.
Fund-raising is an important aspect of organising and adding to school funds. SGBs
have the responsibility of taking measures to supplement resources supplied by the
state to improve the quality of education provided by the school to all learners at the
school. The SASA indicates that SGBs should think creatively of other means of
supplementing their financial resources.

Question 14
What measures are in place to ensure that transparency, accountability and
responsibility in terms of the school finances, are adhered to?

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Most of the participants indicated that to ensure transparency, accountability and
responsibility are adhered to, there are authorization forms and request forms that are
signed by three members of the SGB. The cheque book must be signed by two
signatories to ensure that transparency, accountability and responsibility is adhered to.
Some of these participants stated that the school budget is always communicated to
staff members and parents and they are allowed to provide inputs. The finance
committee monitors the budget and issue quarterly reports to the SGB. Proper
documents and records are made available to all stakeholders.

Another participant mentioned that the principal reports regularly to the finance
committee and the finance committee report back to the SGB. The SGB reports to the
parents at least once a year to ensure transparency.

An important characteristic of the present approach to education management in

general, and financial management specifically, is the emphasis on transparency and
information sharing among all stakeholders. For the school principal and SGB, this
means that they must deal with funds in a responsible manner and that they are
accountable to the parents, the learners, the community and the Department.

Question 15
Comment on the need and appointment of an external auditor for your school?

All the participants stated that the appointment of the external auditor is discussed at
the final SGB meeting of each year. They stated that it is important to appoint a neutral
person not attached to the school, which will ensure that no conflict of interest occurs.
The participants added that an accredited auditor/accountant needs to audit the
financial records of the school annually. Regular auditing ensures consistency,
compliance and sound financial practices.

Responses indicate that there is a need to appoint an independent auditor or

accountant, who is neutral and who is not involved in any affairs or business of the

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school. Such an independent auditor‟s report should verify that the financial reports
compiled by the SGB and principal fairly presents the financial inflow and outflow, and
reflect the financial position of the school at a given time. There is compliance to this
section of the SASA by all participants.

Question 16
In your opinion, what are some of the problems or obstacles encountered by the
SGB in fulfilling their financial management role?

Most of the participants indicated that a lack of knowledge of financial management

acts, policies and expertise by many members of the SGB is a problem. Some of these
participants elaborated and mentioned that many SGB members do not want to confront
the financial decisions taken, as their lack of knowledge may be exposed. This allows
decisions taken by the principal to be implemented unopposed.

Some of the participants linked to the above and mentioned that some principals take
advantage of the ignorance of the SGB to benefit their own agenda at the school. The
lack of formal schooling of some SGB members is also an obstacle, as they basically
make up the numbers and vary rarely contribute to meetings and financial decisions.

A few participants stated that in some cases they sign blank cheques on the request of
the principal, as certain things have to be bought. They indicated that they trust the
principal to buy the items as discussed, but that they do not always follow up to verify
what was bought with the cheque.

One of the participants said that the day-to-day running of funds is not possible for
many SGB members as they have their own work to do.

The responses vary, but indicate that many SGB chairpersons clearly are not
conversant with all the financial policies that guide the role of the SGB. It is therefore no
surprise that some principals take advantage of this situation. SGB chairpersons should

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not be that involved in the day to day running of finances, but should ensure that they
are regularly kept abreast of financial issues of the school.

Question 17
What level of cooperation do you receive from the principal regarding financial
matters of your school?

Most of the participants stated that the level of cooperation that they receive form the
principal is excellent. The principal always consult, workshop and guide the SGB with
regard to financial management issues. The principal cooperate with the SGB and
advise them on the correct use of funds.

Another participant stated that the principal did not cooperate before because the
principal used to do things alone, but fortunately that has been stopped.

One of the participants mentioned that this is not applicable to him. This was a strange
response, as the principal and the SGB chairperson should have a very close
relationship with regard to financial matters of the school.

It appears from the responses of the participants that they receive cooperation from the
principals. The researcher deduced from the responses that SGB chairpersons are
almost led by principals in the decision making process. What SGB chairpersons may
perceive as assistance and advice on how to spend funds, may actually be principals
controlling the money of the school.

Question 18
What level of continual support (if any) do you receive from the District Office
with regard to financial management?

Most of the participants indicated that the district office provides support in terms of
workshops regarding financial management of the school. They also indicated that this

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is not a continual process. No real continual support is received, as the district office
leave the SGBs in general to continue with their work. They do want some documents
at various stages during the year, but that cannot be considered as real contact. The
SMGD is linked to a school to assist with governance and management matters, but
links more with the principal than with them as chairpersons. Any issue can however be
taken up with the SMGD if the need arises.

A few participants stated that the district office does not provide them with continual
support, but only wants the SGB to report on how they manage the finances of the
school. These participants stated that they normally do not ask for too much support as
their principals are capable of managing the finances of the school. It was mentioned by
one of the participants that the district office is only interested in the auditing process at
the end of the year.

Another participant said that support they receive from the district office is in the form of
subsidy grants for the learners only.

Responses indicate that support is provided in the form of training, but that this is not a
continual process. It seems as if SGBs mostly rely on what the SMGD assist the
principal with, as they as chairpersons do not have much contact with the SMGD. No
other type of support was mentioned, except that the schools also receive funding from
the district office. It seems as if SGBs are mostly left on their own devices and allow the
principal to be the link with the district office.

Question 19
Are there any other comments you would like to share regarding the financial
management of the school?

Most of the participants mentioned that all financial stakeholders should know their roles
and responsibilities. The SGBs must be actively involved in the daily management of

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finances in the schools. They stated that the Department should also offer more
workshops for SGBs and that these workshops should cover all aspects of financial
management at the school. It was indicated by some of these participants that these
workshops should be practical in nature – they as SGBs should be given “real world‟
scenarios at these workshops to solve.

Some participants stated that when SGB members are elected one of the criteria should
be a certain financial qualification or capacity, especially members that serve on the
finance committee. This will allow them to scrutinize financial documents with
knowledge and they will be able to actively participate in financial meetings.

SGB chairpersons seem to want to be more involved in the financial matters of their
schools. They need more confidence and as a result want the training they receive to be
more comprehensive and practical. It is essential that the financial matters of schools be
in the hands of SGBs, and not with principals. A mutual co-operation should exist
between them. It is not always possible to elect a member to the SGB who has financial
knowledge, but that reiterate the fact that continual training in this regard is essential.

4.3 CONCLUSION

This chapter reported on the data gathered from the participants in this study. Views
and opinions were reported on in the narrative.

In general, principals seem more comfortable with their financial role than the SGB
chairpersons. It appears as if SGBs are not always playing a leading role with regard to
financial management at the schools, but allow principals to take the lead in many
instances.

The next chapter provides the findings and recommendations of the study.

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 CHAPTER 5

FINDINGS AND RECOMMENDATIONS

5.1 INTRODUCTION

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This study wanted to ascertain the role played by the chairperson of the SGB and the
principal in financial management of the school. The literature study, which forms the
foundation of this research study, has been used to create principles and guidelines for
effective financial management in schools by identifying facts that have been found to
be important in managing finances of the school. In this chapter findings are reported
and recommendations are made.

5.2 SUMMARISED FINDINGS OF THE STUDY

The findings are discussed in two fold. Findings from the literature study will be
discussed first, followed by the findings derived from the questionnaires completed by
principals and the chairpersons of SGBs.

5.2.1 Findings from the Literature study

These findings aim to answer the following research question:

What are the essences of financial school management?

 The four main pillars of management which is organizing, planning, leading and
controlling, is essential in the management of school finances (cf. 2.2).
Delegation refers to the process of transferring the responsibility for a specific
activity or a task to another member of the organization and empowering that
individual to accomplish the task effectively (cf. 2.2.3.1).

 The task of financial management involves monitoring and/or controlling the

financial position of the school and it can be divided into three main functions,
which are analyzing the financial position of the school, managing the asset
structure of the school and managing the financial structure of the school (cf.
2.3.2). A principal as a leader of the school needs to employ all the management

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 functions and principles in order to properly manage the funding received by
his/her school (cf. 2.3.3).

 Financial management in contemporary education management aims to:

o estimate the needs of local educational training;
o obtain finances in accordance with the estimated needs;
o administers the finances thus obtained in a legally correct manner (cf.
2.4).

The following research question is addressed in the next section:

What is the impact of policy related documents on the financial management in

schools?

 Public schools are funded by the state according to the SASA. The state must
fund public schools from public revenue on an equitable basis in order to (1)
ensure the proper exercise of the rights of learners to education and (2) the
redress of past inequalities in education provision. The state must, on an annual
basis, provide sufficient information to public schools regarding the funding
referred to in Sub-section 1 of the SASA to enable public schools to prepare
their budgets for the next financial year (cf. 2.3).

 Section 21 of the SASA provides for the establishment of self managing schools
by permitting schools to apply for some of the functions that were traditionally
carried out by the state. These functions include maintaining school property,
purchasing learning support materials (LSM) and equipment, paying for services
and determining extramural activities. Decentralisation brings with it the
possibility of extreme inequalities – the possibility that local communities,
including parents and educators, may not have the knowledge and resources to
adequately protect the quality of education provided to their children (cf. 2.3.2).

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 Schools are divided into five categories or quintiles - with the poorest schools
receiving seven times more funding per learner than the richest schools. This
approach is justifiable to address historic inequalities, but it also increases
pressure on the SGB of the schools in the top two quintiles to replace the lost
income through fees or other fundraising activities (cf. 2.3.3).

 In terms of financial matters, the principal should have various kinds of school
accounts and records kept properly and should make the best use of funds for
the benefit of learners in consultation with the appropriate structures. The
principal sees to the day-to-day management of the school and has to
implement many directives and policies formulated by the DoBE and the SGB
(cf. 2.4.1).

 One of the most important functions of SGBs is the provision to set a budget and
to recommend school fees as part of the budgeting process. Whereas school
governance used to be characterised by authoritarian and exclusive practices,
the SASA requires broad and democratic participation by parents, teachers and
learners in the life of the school through the medium of SGBs. The SGB must
ensure the existence of and the effective execution of a sound firm financial
policy and also management procedures (cf. 2.4.2).

 An important characteristic of the present approach to education management in

general and financial management in particular, is the emphasis on
transparency and information sharing among all stakeholders. For the school
principal and SGB this means that they must deal with funds in a responsible
manner and that they are accountable to the parents, the learners, the
community and the DoBE. Training in financial management is very important in
preparing and capacitating school principals and finance committee members of
the SGB with financial skills (cf. 2.4.3).

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 A finance committee should be formed to assist the SGB in handling the financial
matters of the school. According to Section 30(1) of the SASA, the SGB may
establish committees including a finance committee and executive committee,
appoint persons who are not members of the SGB to such committees on the
basis of their expertise, and each committee must be chaired by a member of
the SGB (cf. 2.4.4). The role of this committee is made much easier with the
existence of a financial policy at the school. This financial policy may differ from
school to school, but should be used as the guideline for all financial matters at
the school. A good financial policy identifies and articulates the values and the
basic principles to be applied to specific needs in schools. A financial policy
should not only set direction, but should also give direction. It is therefore
essential that all stakeholders involved in the financial matters of the school to
be directly involved in the drafting and implementing of the school‟s financial
policy (cf. 2.4.4.1).

 The SASA makes provision (by means of Article 21), for public schools to
become more responsible for managing certain functions themselves (cf. 2.5.1).
The SASA places a duty on the SGB to keep written record of everything that
has to do with money or property of the school (cf. 2.5.2.1).

 The budget cannot be finalised unless it is approved by the majority of parents

present and voting at a meeting. Before a budget can be approved by the SGB,
it must be presented to a general meeting of parents convened on at least 30
days notice, for consideration and approval by a majority of parents present and
voting (cf. 2.6).

 The SGB of a public school must take all reasonable measures within its means
to supplement the resources that is supplied by the state in order to improve the
quality of education that is provided by the school to all learners at the school
(cf. 2.7).

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  The SGB of a public school must appoint a person registered as an accountant
and/or auditor in terms of the Public Accountants and Auditors Act (Act No. 80 of
1991), to audit the records and financial statements of the school. Auditing of the
financial records is essential to prove that the finances of the school are
managed correctly, effectively and efficiently and to make sure that they are not
mismanaged (cf. 2.8).

The above section provided the major findings derived from the literature study. The
next section deals with the findings gained from the questionnaire responses of
principals and SGB chairpersons. These findings are cross referenced to the questions
of the questionnaires.

5.2.2 Findings from Questionnaires

The findings regarding the responses from principals are provided first, followed by the
findings regarding the responses from chairpersons of SGBs.

5.2.2.1 Responses from the principals

The following findings address the research question:

What are the possible problems experienced regarding the management of

school finances?

 Males still form the largest percentage of principals. A formal finance

qualification does not necessarily mean that principals will experience no
financially related problems at their schools, but it may assist them in
understanding the fundamentals of finance (cf. 4.2.1).

 Good financial management is regarded as management where transparency,

accountability, responsibility and openness serve as a norm (cf. Question 1).

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 Most schools have a finance committee as a sub-committee of the SGB. This
committee drafts a financial policy that should guide the financial matters of the
school. The principals form part of the finance committee. Principals seem
reluctant to comment on their own ability to manage the finances at their schools
(cf. Question 2).

 Principals seem to have a general knowledge of financial management , but

seem to lack more specific financial skills to ensure ultimate financial
management of their schools (cf. Question 5)

 A lack of fundraising strategies, poor financial procedures by the SGB is a

problem perceived by principals. The lack of financial support by the community
is also seen as a problem impacting on the teaching and learning delivery of the
school (cf. Question 15).

 The level of cooperation that principals receive from their respective SGBs differs
from school to school. It is good to see that in some schools the principals and
SGBs work together to the benefit of the school. In some cases principals
perceive the cooperation from the SGB as below standard (cf. Question 16).

 Principals mostly receive continual support from the district office with regard to
financial management, although it seems that this support is not sufficient as
some still lack the necessary financial knowledge. Information provided also
indicates that the District office sometimes seems unwilling to support individual
principals that need assistance (cf. Question 17).

 In some instances the principals feel that decentralization has increased their
workload, without necessarily alleviating their financial problems (cf. Question
18).

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  Principals indicated that although steps in the right direction are made in terms of
sound financial management at schools, certain areas still need attention. For
schools to really function effectively, SGBs should be in a position to assist the
principal in all financial endeavours (cf. Question 20).

The next sub-section provides the findings on the questionnaire responses of SGB
chairpersons.

5.2.2.2 Responses from chairpersons of SGBs

The following findings address the research question:

What are the possible problems experienced regarding the management of

school finances?

 Males form the largest percentage of SGB chairpersons. It would be to the

benefit if a SGB chairperson has some SGB experience prior to election as
chairperson of the SGB. This may provide more confidence once elected as
chairperson (cf. 4.2.3).

 It is interesting to note that a high number of chairpersons either did not complete
their secondary schooling or only matriculated. Academic qualifications do not
necessarily make for a better chairperson, but it may play a role in the way they
are perceived by other qualified members of the SGB or even the principal and
teachers on the SGB (cf. 4.2.3).

 Experience as a chairperson is a positive aspect in terms of being a successful

SGB. Care should however also be given to the fact that complacency can creep
in and that growth be hampered at a school if the same person is chairperson of
the SGB for too long (cf. 4.2.3).

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 The funds that schools receive from the department are not enough. Funding
that is received from the department must be increased and must be received in
good time to buy educational resources such as, textbooks, stationary,
photocopy paper and equipment for learners (cf. Question 4).

 Financial management workshops of SGBs must be conducted immediately

after the SGB have been elected and that follow-up workshops are needed after
that. It seems essential that training be done prior to the annual budget be
drafted. Mention was made that these workshops should be considered for
weekends to ensure that most SGB members are able to attend. When policy
changes come into effect, SGBs should be informed and trained again on new
policies (cf. Question 7).

 SGB chairpersons want various aspects to be covered in financial management

training. It seems as if SGB members are less knowledgable than what they
want to admit and that most of them need training in some of the fields of
financial management. Almost all aspects of financial management at schools
were mentioned as a need for training (cf. Question 8).

 SGB chairpersons want to gain knowledge of how finances should be managed.

They want to gain knowledge on how to handle financial statements and sound
generally accepted financial practices. The SASA was indicated as an Act that
should guide them in terms of finances. The interpretation of financial reports
seems to be a major problem area for SGB chairpersons (cf. Question 9).

 The use of English only in the current training material of SGBs disadvantages
some of them. Other languages must be used as well as many of the SGB
members are not conversant enough in English to understand financial
concepts. It was brought to the fore that the SGB training material should be
written in the language that they all understand (cf. Question 10).

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 The drafting and controlling of the budget is an important role of the SGB. It is
also clear that legally it is the responsibility of the SGB to draw up the school
budget, but in most cases, due to a lack of financial information on the part of
the SGB, it is done by the principal and the staff and then presented to the SGB
(cf. Question 11).

 Fund-raising is an important aspect of organising and adding to school funds.

SGBs have the responsibility of taking measures to supplement resources
supplied by the state to improve the quality of education provided by the school
to all learners at the school. The SASA indicates that SGBs should think
creatively of other means of supplementing their financial resources (cf.
Question 13).

 There is a need to appoint an independent auditor or accountant, who is neutral

and who is not involved in any affairs or business of the school. Such an
independent auditor‟s report should verify that the financial reports compiled by
the SGB and principal fairly presents the financial inflow and outflow, and reflect
the financial position of the school at a given time (cf. Question 15).

 Many SGB chairpersons clearly are not conversant with all the financial policies
that guide the role of the SGB. It is therefore no surprise that some principals
take advantage of this situation. SGB chairpersons should not be that involved in
the day to day running of finances, but should ensure that they are regularly kept
abreast of financial issues of the school (cf. Question 16).

 SGB chairpersons receive cooperation from the principals. The researcher

deduced from the responses that SGB chairpersons are almost led by principals
in the decision making process. What SGB chairpersons may perceive as
assistance and advice on how to spend funds, may actually be principals
controlling the money of the school (cf. Question 17).

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  Support to SGB chairpersons is provided in the form of training, but this is not a
continual process. It seems as if SGBs mostly rely on what the SMGD assist the
principal with, as they as chairpersons do not have much contact with the
SMGD. No other type of support was mentioned, except that the schools also
receive funding from the district office. It seems as if SGBs are mostly left on
their own devices and allow the principal to be the link with the district office (cf.
Question 18).

 SGB chairpersons want to be more involved in the financial matters of their

schools. They need more confidence and as a result want the training they
receive to be more comprehensive and practical. It is not always possible to
elect a member to the SGB who has financial knowledge, but that reiterate the
fact that continual training in this regard is essential (cf. Question 19).

The next section provides the recommendations to this study.

5.3 RECOMMENDATIONS

This section addresses the research question:

What possible solutions with regard to financial management in schools can be

brought forward?

On the basis of the findings obtained from the questionnaires of the principal and the
chairpersons of SGBs the following recommendations are made:

 Both the principal and the SGB chairperson must be trained on financial
management by the SMGD, or someone appointed by the DoBE. External
service providers or Higher Education Institutions (HEIs) also offer an option to
be involved in basic financial training. A short course can be developed by the
DoBE in conjunction with HEIs and offered to principals SGB members.

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 School communities must ensure that people with the necessary skills are
elected to SGBs. This should include a person with sound financial skills, who
could be chairing or co-opted to the finance committee. Relevant people with
skills who are parents should be headhunted to serve on the SGB.

 The principal and the SGB (through the chairperson) must devise strategies to
obtain additional funds from the parents, the community and private institutions to
benefit the learners. Such strategies can be discussed at a parents meeting
where each grade could be asked to organize one project for the year to raise
funds.

 The principals and the SGB chairperson must ensure that all the funds that are
received by the school are controlled and used properly. This means that all the
money that the school receives must be written into journals or books of first
entry. This can be done either manually or electronically. The DoBE should
consider buying and downloading Accounting software for each school in the
district. Designated people per school should receive training to capture financial
information on such a software programme.

 Principals and SGB Chairpersons must have sound mechanisms and

instruments in place to prevent fraudulent transactions and misuse of funds. Not
only should a finance committee be in place, it should be chaired by an SGB
member with sound financial knowledge.

 The SGB should take the lead during the discussion on financial matters. The
principal may be most knowledgeable regarding how funds should be distributed,
but SGBs should not be bullied into making decisions due to a lack of financial
knowledge.

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  There must be openness, transparency, trust and communication in financial
management processes in schools. A close relationship between the principal
and the SGB chairperson is of the utmost importance to ensure proper financial
management at the school.

 The current SGB training material must be written in the language that all SGB
members understand. South Africa is a multilingual country and school
governance is too important an issue not to ensure that members of SGBs are
trained to the level that they can positively contribute in meetings.

 Education related policies change often. Continual training is necessary to keep

SGBs on par with the changes that affect the budget of the school.

 The school must form partnership with audit firms or financial companies with
good financial standing to assist them with their financial records. This can be a
community project for such firms and companies. The school can also be
assisted by HEIs – the DoBE should take the initiative to make contact with these
institutions. Part of the corner stone of HEIs is community service and this may
be an excellent opportunity to form a lasting partnership.

5.4 SUGGESTIONS FOR FURTHER RESEARCH

 The improvement of financial management of dysfunctional schools through co-

opting principals of functional schools to assist with financial management.

 The possible effect of poor financial management on appropriate curriculum

delivery in secondary schools.

5.5 CONCLUSION

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This study dealt with financial management in schools in Lejweleputswa District. The
study aimed to establish the understanding the principals and the chairpersons of the
SGBs have on financial management in schools. The researcher‟s concern was
whether financial management policies and practices were implemented properly in the
schools.

The development of financial skills and the training needs of the principals and the
SGBs chairpersons were also of great concern. Before the investigation was
undertaken, literature was reviewed to gain insight into financial management systems.
Responses from principals and SGB chairpersons lead the researcher to provide the
findings and recommendations of this study. These were linked to the research
questions to ascertain whether the study successfully answered these research
questions. It is the view of the researcher that these research questions were
successfully answered.

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 ANNEXURE A
TEL :0794997980 33 Falstaff
Street
Fax: 057 5443
Bedelia
The District Director
WELKOM
Department of Education
9460
Lejweleputswa District
18/05/2010
WELKOM

Dear Sir

RE: PERMISSION TO CONDUCT A SURVEY

I hereby wish to request permission to conduct a research study around the schools in your
District. In order for me to be able to conduct study I will need your permission to use
principals of and the chairpersons of the SGBs of the schools.

The research topic to be studied is titled: The effectiveness of financial management in

schools in the Lejweleputswa district.

The relevant areas to be covered include:

The research is done under M.ED: with CENTRAL UNIVERSITY OF TECHNOLOGY .
The Programme supervisor is Professor G.J.V Schlebusch and his contact number is
(0579103778).
I will appreciate if you can give me permission to conduct this study around the schools in
your District.

I thank you in advance for your cooperation.

Y ours faithfully

TLALE ESSAU MPOLOKENG (MR)

ANNEXURE B

Page | 129
Page | 130
 ANNEXURE C
Letter to principals
Tel: (057) 3532901 33 Falstaff Street
Fax: (057)3575443 Bedelia
WELKOM
9460

18 MAY 2010
The Principal
…………………………..
…………………………..

Dear Sir/Madam
RE: PERMISSION TO CONDUCT A SURVEY
I hereby wish to request permission to conduct a research study in your school. The
research topic to be studied is titled: The effectiveness of financial management in all
schools in the Lejweleputswa Education District.

In order for me to be able to conduct this study I will need your permission to use you as
the principal and your SGB chairperson for the administration.

I am of the opinion that the findings of this research will lay the foundation for the
effectiveness of financial management in schools in the Lejweleputswa District.

I will appreciate if you could complete the questionnaire as fully as possible. The
information will be treated in strict confidentiality and will be used for the purpose of
research only.

Thank you in advance for your cooperation.

Yours faithfully

TLALE ESSAU MPOLOKENG (MR)

ANNEXURE D

Page | 131
Tel: (057) 3532901 33 Falstaff Street
Fax: (057)3575443 Bedelia
WELKOM
9460

For attention : …………………………….

Dear Sir or Madam

RE: REQUEST TO PARTICIPATE IN THE RESEARCH

I am conducting research in Education Management with my main focus on the

effectiveness of financial management in schools in the Lejweleputswa district. The
study that I am pursuing requires that the Chairperson of the School Governing Body
and the principal to help by completing the questionnaire. I am humbly requesting your
cooperation and participation in this study as you have been selected as part of the
sample.

The research will guarantee anonymity and confidentiality to all respondents and their
institutions.

Your cooperation will be highly appreciated.

Thanking you in advance

Yours faithfully

TLALE ESSAU MPOLOKENG(MR)

ANNEXURE E

Page | 132
 CENTRAL UNIVERSITY OF TECHNOLOGY, FREE STATE
SCHOOL OF TEACHER EDUCATION

QUESTIONNAIRE FOR PRINCIPALS ON FINANCIAL MANAGEMENT OF SCHOOLS

INSTRUCTIONS TO PARTICIPANTS/RESPONDENTS

 Please note that there is no right or wrong responses to the items or questions in
this questionnaire. Your opinion is valuable to me.

 Also note that through your responses you will be making a valuable contribution
to the study.

 Please answer all the questions.

YOU COMPLETE THIS QUESTIONNAIRE ANONYMOUSLY

SECTION A: Biographic information of participants.

Please furnish the following biographic information:

Page | 133
1 Gender:
M F

2 Age:
3 Qualifications:
4 Type of school:____________________________________________________
5 What is the quintile of your school? ___________________________________
6 How long have you been a principal?
7 Any formal qualification in finances? __________________________________

SECTION B

Page | 134
1 What would you consider to be good financial management?

2 Comment on your ability to manage the financial responsibilities of your school.

3 Who do you think should be responsible for the training of principals in terms of
their new financial responsibilities?

4 According to you, what should be covered in the training of financial school

management for principals?

5 What would you want to gain from such a training programme?

Page | 135
6 Who is ultimately responsible for the drawing up of the school budget and what is
your role function in drawing up the budget?
________________________________________________________________
________________________________________________________________

7 Legally it is the function of the SGB to manage the school budget. What role
does the SGB play in this regard at your school?
________________________________________________________________
________________________________________________________________

8 Comment on the procedure of budgeting at your school?

________________________________________________________________
________________________________________________________________

9 How do you monitor the budget at your school? Explain.

________________________________________________________________
________________________________________________________________

Page | 136
10 Comment on your success to keep to the budget. You may mention any
budgeted items that cause problems in this regard.
________________________________________________________________
________________________________________________________________

11 Does a Finance Committee exists (is it properly constituted) and what is your role
in the Finance Committee?
________________________________________________________________
________________________________________________________________

12 What measures do you have in place to ensure that transparency, accountability

and responsibility, in terms of your school‟s finances, are adhered to?

________________________________________________________________
________________________________________________________________

13 Are you able to delegate any of your financial role functions to your senior
management team, if so, what functions are you able to delegate?

________________________________________________________________
________________________________________________________________

Page | 137
14 Who oversees the financial records of the school?
________________________________________________________________
________________________________________________________________
________________________________________________________________
________________________________________________________________

15 In your opinion, what are some of the problems or obstacles that you
encountered in fulfilling your financial management role?

________________________________________________________________
________________________________________________________________

16 What level of cooperation do you receive from your SGB regarding financial
matters of your school?

________________________________________________________________
________________________________________________________________

17 What level of continual support (if any) do you receive from the District Office
with regard to financial management?

________________________________________________________________
________________________________________________________________

Page | 138
18 What impact did decentralisation of funds to schools have on you as
financial manager of the school?

19 How would you describe your success with regard to the day-to-day financial
administration at your school?

20 Are there any other comments you would like to share regarding the financial
management of a school?

Page | 139
 ANNEXURE F

CENTRAL UNIVERSITY OF TECHNOLOGY, FREE STATE

SCHOOL OF TEACHER EDUCATION

QUESTIONNAIRE FOR SGB CHAIRPERSON ON FINANCIAL MANAGEMENT OF

SCHOOLS

INSTRUCTIONS TO PARTICIPANTS/RESPONDENTS

 Please note that there is no right or wrong responses to the items or questions in
this questionnaire. Your opinion is valuable to me.

 Also note that through your responses you will be making a valuable contribution
to the study.

 Please answer all the questions.

YOU COMPLETE THIS QUESTIONNAIRE ANONYMOUSLY

SECTION A: Biographic information of participants.

Please furnish the following biographic information:

1 Gender:
M F

Page | 140
2 Age:
3 Qualifications: Mark one box with X

No Matric
Matric
University
Other college

4 Type of school:____________________________________________________
5 What is the quintile of your school? ___________________________________
6 How long have you been
6.1 a member of the SGB?
6.2 chairperson of the SGB? _______________

Page | 141
SECTION B (Please provide comprehensive answers)

1 What would you consider to be good financial management?

2 Who is responsible for the finances of your school?

3 Briefly describe the role that the principal, treasurer or other members play in the
management of the school‟s funds.

4 What is your opinion regarding funding received from the department for your
school?

Page | 142
5 What do you think are the financial functions of the SGB?

6 Who do you think should be responsible for the training of SGB‟s in terms of their
financial responsibilities?

7 When should financial management workshops for SGB members be presented

and who should present it?

8 According to you, what should be covered in the training of financial school

management for SGB‟s?

Page | 143
9 What would you want to gain from such a training programme?

10 Comment on the use of English only in current training material for SGB‟s.

11 Legally it is the function of the SGB to manage the school budget. What role(s)
does the SGB play in this regard at your school?

12 Does a Finance Committee exist (is it properly constituted) and what is the role of
the SGB in the Finance Committee?

13 Comment on the necessity of a Fundraising Committee at your school?

Page | 144
14 What measures are in place to ensure that transparency, accountability and
responsibility in terms of the school‟s finances, are adhered to?

15 Comment on the need and appointment of an external auditor for your school.

16 In your opinion, what are some of the problems or obstacles encountered by the
SGB in fulfilling their financial management role?

17 What level of cooperation do you receive from the principal regarding financial
matters of your school?

Page | 145
18 What level of continual support (if any) do you receive from the District Office
with regard to financial management?

19 Are there any other comments you would like to share regarding the financial
management of a school?

20 What are the factors that impact negatively on the role of the SGBs with regard to
the management of school finances?
________________________________________________________________
________________________________________________________________
________________________________________________________________
________________________________________________________________

Thank you for your participation!!

Page | 146